For many people, the whole idea about adopting a mobile home lifestyle is to live debt-free. Paying cash means owning your home without the hassle and restrictions of a finance deal.
These days, paying cash does not mean handing over a pile of dollar bills but directly buying your property from your cash savings.
Can You Buy a Mobile Home for Cash?
Cash is an acceptable way of making any purchase and comes with minimal fees and handling charges.
Most sellers of mobile homes, private or companies want guaranteed payment without fuss, and cash is always acceptable.
Having said that, rocking up with a gym bag full of dollars will raise a few eyebrows and questions. Most sellers will expect a digital transfer – it is still cash but causes fewer issues and concerns about money laundering.
Plus, it is safer for you to pay that way.
1. Pros of a Cash Purchase
The enormous advantage of having cash to buy your mobile home is that you cut out a load of administration involved with applying for finance.
The plus points are:
- Less administrative paperwork.
- No interest and financing charges.
- Room to negotiate – extras or a discount for cash.
- Quicker transaction.
- Full ownership of your mobile home.
2. Cons of a Cash Purchase
Honestly, there are few, if any, cons to buying a mobile home out of your own resources, but these are:
- You don’t have extra professional eyes on the property – a loan financer insists on evidence that the mobile home is worth the money they lend you.
- Depending on the seller, you risk the loss of your funds through fraud.
- Spending your money on the mobile home may leave you short of cash for other expenses.
In addition to the capital cost of the mobile home, if you buy a used home, you may have other expenses to pay.
If you have a tight budget, you may wish to consider putting down a 50% deposit and using loan finance for the balance. Once you have finished the transaction, you can pay off the balance if sufficient cash remains.
You will pay fees and interest, but it may be worth it to ensure you have enough funds to deal with the other expenses that don’t qualify for loan finance.
3. Mobile Home Purchase Options
When you choose to buy a mobile home for cash, you have various potential scenarios:
- Used and you buy land separately.
- Used with the land.
- Purchase on a park lot – you take over the lot fees with the home.
- New and delivered to a park lot.
- New and delivered to a land plot.
Government-backed loan finance is available only to a manufactured home with one move in its history.
If you are a cash buyer, your home moving again is not an issue. But it may reduce the resell value when you want to sell the mobile home.
4. Buying Land for Your Mobile Home
You have the option of paying cash for your land or taking out loan finance for the land portion of your mobile home purchase.
Buying land is not as straightforward as purchasing a plot and installing a mobile home.
Some land plots are not suitable for mobile homes, and you need to complete your due diligence before investing in land that you cannot use for your manufactured house.
You need to check:
- Land quality.
Before buying your land, you need a professional to inspect for soil pollutants and stability. Test drilling will reveal if there are air pockets or other stability issues with your potential land plot.
Land stability will impact possible foundations and support for your mobile home.
Soil pollutants from previous usage are a hidden danger, and it is worth paying for professional testing to establish the land is suitable for your health.
You can’t deliver your mobile home to your land if you don’t have suitable access.
Plus, you need to check the availability of utilities or if you need an off-grid solution to power your mobile home.
The accessibility of your plot determines how straightforward it is for you to lay a foundation, transport your mobile home and connect to utilities.
If you buy direct from the manufacturer, the installation is part of the transaction, but you still need an accessible site.
Issues can arise if you don’t have complete title to the land plot.
If there are utilities underneath the land with guaranteed access for the utility supplier, you can’t put a mobile home on top of them.
If a farmer has grazing rights, his rights bar you from reducing his grazing land by installing a mobile home.
Before parting with your cash for a land plot, have a legal expert check your title to the land, looking for any issues that prevent you from using the land for a mobile home.
Local zoning rules may specify that the land is unsuitable for a mobile home or that you can’t use it for a specific purpose like running a business.
Your state zones land for accepted uses, and this covers the type of structures you can install.
5. Legal Transport for Mobile Homes
Transporting the structure of your mobile home is not a DIY process as there is plenty of legislation to follow.
If you buy from a manufacturer, they will take care of the legalities.
If you buy used, you must use a licensed, insured, and bonded professional to transport the mobile home. Plus, you need a moving permit.
Before you can get the moving permit, you need:
- County treasurer certificate – this document states there are no unpaid property taxes connected with the mobile home.
- Certificate of title – you can’t move a home you don’t own.
Before you can transport your mobile home, you need all your paperwork in order.
Before parting with your cash payment, ensure all your paperwork is signed and delivered. Otherwise, you may buy a mobile home you can’t legally transport.
6. HUD Code Compliant
You can’t plant a mobile home in any state unless it is HUD code compliant.
You can still buy homes built before the HUD code, but you must bring them up to code to move them to another location.
Now you might get a cash bargain on an older home, but check you have enough cash in reserve for all the remedial work necessary to bring it up to code.
7. Park Rules
Before parting with your cash for a mobile home on a park lot, check that the park is still happy for you to continue to use the mobile home on that lot.
Most parks have rules and regulations about the type and age of mobile homes permitted on the site.
As part of due diligence, ensure that the mobile home you are buying fits the rules with plenty of life left.
8. Are There Special Rules for Buying a Mobile Home with Cash?
Cash is the payment method, and the payment method does not change the legal processes involved with buying a mobile home.
When you pay cash, you don’t have a lender in the mix, and if you are not careful, you may miss some of the checks and balances necessary to ensure you pick up a bargain rather than a headache.
Before paying with your cash, ensure that you have a professional inspection and employ a legal expert with experience to check and obtain all relevant paperwork.
When you buy a mobile home or a conventional home for cash, you still go through the legal process to transfer the title.
9. What About Buying a Mobile Home for Cash from eBay or Similar?
Online auction sites like eBay have specific rules that cover property transactions online.
Real estate (manufactured homes class as real estate) is not a bid and win situation. The listing is more of an invitation to negotiate with the seller to agree on a price and complete the necessary paperwork.
Is Buying a Mobile Home for Cash a Good Idea?
If you have plenty of cash available, investing in a big-ticket item like a mobile home saves financing. You get a place to live without the monthly outgoings of loans and interest payments.
But if the purchase with cash will wipe out your reserves, you might want to consider holding some money for emergencies and repairs.
As you can lay down an enormous deposit, you should get favorable interest rates and terms on either a mortgage or a chattel loan.
Buying a mobile home for cash is a good idea if you have the money available and don’t need it for anything else.
But ensure you get the discount or extras available for making a cash purchase. A cash buyer can complete a transaction quickly and with minimal fuss.