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How to Sell a Mobile Home: A Guide on Financing, Price, and More

Want to Sell a Mobile Home? To begin with, it’s important to note that what were once referred to as “mobile homes” are now commonly called “manufactured homes.” However, since many people are still familiar with the older term, we’ll use both terms interchangeably. It’s worth noting that if you want to Sell a Mobile Home, you should understand that it is not the same as selling a traditional home, so you’ll need to modify your approach accordingly. Here’s what you need to know about selling a manufactured/mobile home and how it differs from a typical real estate transaction.

What is chattel?

Selling both the land and the manufactured home that sits on it is not much different from selling a traditional home. However, if you’re only trying to sell a mobile home and not the land it’s on, this can significantly change the process.

If the mobile home is properly affixed to the land and sold together with the land, it is considered real estate or real property. But if the mobile home is not being sold with the land, it is classified as ‘personal property’ or chattel. Roughly 50% of those who reside in manufactured homes are landowners, while the other half live in what’s referred to as a “lot lease” situation. In such instances, the home is situated on land that is leased from someone else, typically in a park or community. If you are trying to sell a mobile home in a lot lease scenario, it’s essential to keep in mind that the park administration will have some say in the matter. As a result, you will need to involve them in the process.

How to finance a mobile home?

Financing options for buyers of lot lease manufactured homes differ from those for traditional real estate. Here are four types of buyer financing to consider:

  1. FHA loan: It’s possible to obtain a traditional mortgage on a lot lease manufactured home, but there are only a limited number of lenders who will do it. The FHA insures these loans, but it has stringent requirements for the properties it will finance. It also mandates that the home pass an inspection, and that the buyer sign at least a three-year lease with the park.
  2. Chattel loan: A chattel loan is similar to an auto loan, but it’s designed specifically for property such as manufactured homes. There are lenders that specialize in this type of financing, and they do not have as many requirements as an FHA loan. However, they do typically require an inspection. Their rates are not as competitive as those of traditional lenders.
  3. Owner financing: If the buyer has enough cash for a down payment but lacks the credit score (or willingness) to take out a loan, you can finance the purchase. The way this works is the buyer provides you with a down payment, and you agree on repayment terms for the remainder of the loan. The title is transferred with the down payment, but you place a lien on the property until it’s paid off. You’ll need a lawyer to help you draft this type of agreement, and you’ll want to thoroughly research the buyer to ensure they are a good prospect.
  4. Cash: A cash buyer is the easiest, and this is entirely feasible given the cost of mobile homes. If your home is not in excellent condition or you owe a significant amount on it, a cash buyer may be your best option. The only drawback is that cash buyers usually have their choice of homes, so you may have to lower the price to close the deal.

How to price a mobile home?

When selling any property, setting the right price is crucial to attract potential buyers quickly and avoid a lengthy wait on the market. Selling a mobile home requires you to consider two factors:

  • the value of the land (if you own it) and
  • the value of the home itself

Generally, land value appreciates over time, while the value of the mobile home decreases.

Mobile homes depreciate like cars; however, land appreciates. To determine the value of a manufactured home, you can refer to the National Appraisal Guide, which is an excellent resource. Additionally, you can hire a professional appraiser to determine the value of the home in its current location, which may cost a few hundred dollars but is worth the investment.

How to close on a mobile home?

After finding a suitable buyer, completing the inspection process, and securing funding, the next step is to close the deal. If you are selling both the home and the land, the closing process will be similar to that of a traditional home. However, if you only want to sell a mobile home, it will be more akin to selling a car, and you may have to accompany your buyer to the DMV to finalize the transaction.

Regardless of whether you’re selling both the home and the land, or just the home, the transfer of the title to the new owner will occur once payment has been received. If you’re providing owner financing, it’s important to ensure that your name is listed as a lien holder on the title during the transfer process, and that the lien is only removed once the loan has been completely paid off.

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