Avalon Building Systems Blog

One of the most common questions asked to bankers, builders and realtors regarding modular homes pertains to their resale value. “When I sell my modular home, will it sell for the same price as a stick built home that is comparable?”

Many people wonder about the resale value of a modular home. Oftentimes however, your profit will be higher, provided you have maintained and cared for your home, because modular homes cost about 10-15% less to build. Modular homes are appraised to the same standards as a site built home, so both types of homes are assessed at the same amount.

So now that this question has been answered, let’s point out some of the other benefits of modular homes. They are built much faster; in approximately 10 to 12 weeks from the day you decide to build a modular home is when you will get the keys to move in. The modules are built in a factory and delivered to your building site. From that day the process takes about 3-6 weeks to complete.

However, these benefits above are not the best part of building a modular home. Talk to anyone who has built a traditionally constructed home and they will tell you that it cost far more than they had initially planned. When building a modular home, your budget is solid. The pricing is guaranteed, unless you make a change in the building process. When you decide on a floor plan, the cost of building that home can be priced to the dollar. At Avalon there are no surprising material costs or labor costs. That is the biggest advantage to building a modular home.

In order to buy a new home, the home must be appraised so you can begin the process of getting a mortgage or loan. An appraisal of a modular home is the estimated amount a home buyer can expect to pay for their new home. When buying any piece of property, including modular homes you need a licensed professional appraiser. However, if the home is not yet built, how is it actually appraised?

The appraiser will inspect the modular home plans to have an idea of how much your new home should cost. Generally, they use information on labor rates, building costs, and depreciation and appreciation in the area where the property is being built. Also during the appraisal process, they will use sales comparisons, prices and values of compatible homes sold in the area, to determine the current modular home value.
 
Once a thorough analysis of the property has been completed, a report is created which is used to initiate the mortgage or loan process. Included in the report would be the property specifications, the replacement cost analysis and the comparative sales analysis.

The replacement cost analysis is total amount spent on the construction and the materials of the modular home, and the lot value. The comparative sales analysis, as mentioned, is the comparison of the actual property to other similar properties that have been sold in the same town or county.

These factors will determine the current total value of the property. The modular home appraisal will then be finalized so that the loan transaction can take place. The calculated total value of the modular home will help you determine future expenses such as utilities and real estate taxes.