Introduction to Modular Homes in Maryland

We developed this guide for building a modular home in Maryland because of our first-hand experience with the process.  It is also one of the most frequent inquiries that we get.  This guide describes the whole process of building a modular home.  Some people consider them to be an “Instant House.”

It’s important to note right from the start that this material was created for modular homes in Maryland and may not apply in other States.  In addition, each County within Maryland may have slightly different requirements on modular homes.  These could include requirements pertaining to perc tests and private water/sewer systems.  If you are interested in learning about the requirements in other States, you can contact us through our Nationwide Referral Directory.  We will connect you to someone who can assist you.

It is important for you as a prospective buyer to realize right from the start that a modular home is not a trailer,  a double-wide, or a “manufactured” homes (which is another word for trailer).  Many people are amazed when they start to talk price because they think that building a modular home is cheaper.  That’s because they usually confuse a modular home with a manufactured home.

A true modular home is constructed just like a stick-built house.  The only difference, really, is that it is built in a climate-controlled factory instead of right on the lot where it can sit out in the elements.

There are two main players involved with building a modular home.  First, there is the “builder.”  That is the person who erects the house on your lot and takes care of all of the details like connecting to utilities, etc.  There is also the “manufacturer.”  That is the company that actually constructs the house in the factory and delivers it to the site.

The State of Maryland has a list of approved modular home manufacturers.  Before you begin the process, you need to find out which manufacturer your builder is using to construct the home.  Most builders are also Realtors and, in theory, that can simplify things for you.  The big exception is that the builder is also the seller and/or the “seller’s agent,” and he is going to do what is in HIS best interest.  You need to have a Realtor looking out for YOUR best interest!

There is a lot of work that you as a buyer must do to make the construction of your modular home happen.  This is why it’s important for you to work with a Realtor through an Exclusive Right to Represent the Buyer/Tenant Agreement, so that you will know what’s coming as the days go by and you get close to moving in.  The information here is accurate to the best of our knowledge at this time based on our first-hand experience in building a modular home.

There are quite a few steps involved in constructing a modular home.  Actually, much of the information below also applies to people who are interested in having a house built “stick by stick” on site.  These steps are:

Finding and Purchasing a Lot to Build

Unlike buying a house in a planned community, when you build a modular home, you can put it on almost any lot that you choose.  If you don’t already own a lot, we can help you find one in an area of your choice.  Just Contact Us and describe what you’re looking for and we’ll help you search.

There are a lot of things to consider when looking at land and, in today’s market, it is not very easy to find “good” land to build on that is inexpensive.  You may want to review our  Guide to Buying Land, which will give you much of the information that you will need.

Probably the two most important things to look for is land that will be big enough (and has the appropriate topography) to support a house.  The second is the ability to put water and sewer of some kind on the property.  This can be either public water and public sewer, well and septic, or some combination.  If public water and sewer is not available, you will need to consider a well and septic, which means that the land must have an approved perc test.  While the general principle is the same, each County does things a little differently.

Arranging the Financing for the Purchase

This is not really much different from arranging financing for any other new home.  If you purchase a previously-owned home, you simply execute a conventional mortgage, an FHA loan or a VA loan.  When you buy a home in a planned community, you execute a conventional mortgage when you go to closing and get ready to move in.  This is done after the construction is completed.  In planned communities, the builder executes the construction loans on multiple properties and, thereby retains ownership until you go to closing.  This sometimes limits your choices and your ability to determine how and when your new home is built.

When you purchase and build a modular home, you will finance the purchase with a construction loan that is then converted to a conventional mortgage when you take possession of your new modular home.  This puts you in charge of the entire process because you own the land and the house right from the start.  We can work with you on reviewing the financing options that are available, and suggest loan officers who can easily handle these transactions.

Deciding on the Type of House you Want

You can pick one of the many designs that modular home builders offer.  We have worked with several builders and know that each one is slightly different.  You will need to speak directly with the builder to help you decide on a house style and floor plan and determine the price for the total project.

You should do this as early in the process as possible, because we like to have the builder involved in the land acquisition process.  Many times they can look at a piece of land and determine what type of house will be best.  It is not necessary, though, for you to enter into an agreement with the builder in order for me to help you find land to build on.

Most builders are willing to work with Realtors who represent buyer clients.  When you Contact Us about building a new modular home, we will discuss the packages that various builders offer and you can then decide which one is right for you.

The builder that you ultimately choose to construct your home (whether it’s a modular or a stick-built) doesn’t matter to us.  The only thing that we think is very, very important when you are buying (building) a home is that you have an experienced Realtor to work with you the an Exclusive Right to Represent the Buyer/Tenant Agreement and your builder (who is the seller).

Once you find a floor plan that you like, we will meet with the builder of your choice, who will build it “as is” or modify it to suit your individual lifestyle.  You can even develop your own floor plan.  Most modular home builders will work with you to tailor a specific floor plan to suite your needs.

Typically, you can take as long as you like to make sure that the floor plans are exactly the way you want them.  The land acquisition process can take anywhere from one month (if we’re very lucky) to as long as six months, so designing the house is not something that needs to be done right away.

Until the final plans are submitted to the factory, there are no additional charges for changing your mind.  Depending upon your choices, the house will be constructed complete with all counters, fixtures, floor coverings and carpets.  In some cases, the floor coverings and/or carpets may be purchased locally and installed after the house is delivered.

Executing the Construction Loan

The term of a construction loan is normally six months but can also be longer.  This provides you with more than enough time for the completion of your new modular home.  During that time, you make interest-only payments based on the amount of money that the builder draws out of the account for the various stages of construction.  There are also permits that must be executed before construction can begin, and these are usually the first expenditures from the construction loan.  Many times your builder will recommend a loan officer to you and request that you use them for the financing.  This is usually because the builder and the loan officer have reached an agreement on how the “draws” for constructing the house will be issued.

You also need to acquire a “builder’s risk” insurance policy.  These policies protect you and the builder against losses before you take possession of your home, at which time, the policy converts to a regular homeowner policy.

Clearing and Preparing the Lot for Construction

This is the stage where you actually start to see things happen.  The area where the house will be placed must be clear of any trees, brush and debris.  The builder typically will clear an area that is approximately 5,000 square feet for the construction of the house.  Naturally, this is where local ordinances and environmental issues may come into play. The land is then prepared for construction of the basement, crawl space or slab.  After all of the debris is removed, the excavating team will dig a hole that is somewhat larger than the square footage of the house.  Drainage holes are also dug to remove water from the hole in the event of rain.

Ordering Your Modular Home

Once you finalize the floor plan and house style, the builder will submit the plans to the factory.  The modular home is constructed in a climate-controlled factory that is very similar to an airplane hanger.  There are usually three houses under construction there at any given time.  It is at this point where any changes that you might want to make to the house would probably cost extra, because it would involve modifying the plans and having the factory change components that may have already been completed.  In a matter of weeks, your modular home is ready to be delivered.

Erecting the Basement or Crawl Space

While the modular home is being built at the factory, the building will be making the final preparations to the lot.  These include pouring the footers and then constructing the walls for a basement or crawl space (depending on which you want).  The walls can be made of either poured concrete or with cinder blocks.  After the concrete is hardened, a knee wall is built along the top.  This is what the house will sit on once it is lifted onto its foundation. For houses that will have a basement, the floor is usually poured after the modular home is delivered.

Delivering the New Modular Home

Your new modular home is built in a factory that may be as much as 250 miles away.  It must be delivered to your lot when it is completed.  The house will travel over interstate highways and other roadways on tractor-trailers and typically will arrive the day before the house is to be placed on the foundation.  Because the modular home components travel long distances, they are wrapped to protect them from the elements.  Some of the wrapping will be removed once the trucks have arrived, and the remaining protective coverings will be removed immediately before the modular home is placed on its foundation.

Lifting the House Onto its Foundation

This is probably the most exciting part of the whole process.  Usually, this phase takes about 5 hours or so.  We strongly recommend that you make sure to be on the site when your modular home is lifted onto the foundation.  It is an experience that you will not soon forget.

Seeing the first half of your house coming down the road on the truck and the crane getting into position is quite a sight!  The back half of the house goes up first, followed soon after by the front half.  They are then bolted together and bolted to the foundation and support columns or steel beam, depending upon your floor plan.  The final step is the raising of the roof.

Completing the Finishing Touches

During this phase, the remaining siding is put up, the brick work (if applicable) is done, the plumbing and electricity are hooked up, the phone service and cable television service is installed, and the appliances are delivered.  For houses with a basement, this is also where the stairways that connect the basement to the main floor are erected.  Also, if required by codes, the sump pump will be installed.

Grading and Landscaping the Property

One of the last steps is the grading and landscaping of your new yard.  This includes adding the driveway (which can be gravel, asphalt or cement) and pouring the sidewalk and front porch.  Then the yard is graded with topsoil and the grass is planted.

Going to Settlement

Going to settlement on the purchase of a modular home is no different from going to settlement when you purchase a resale property, a new house being built in a planned community by a major developer, or a new house being built by a small builder.  It is at this time that your new modular home actually becomes yours and you are free to move in.

Moving In

Many people believe that this is the absolute worst part of buying a new home.  There is a lot of work that must be done unpacking and deciding where everything should go, and it seems at times that it will never get finished.  The fact is, though, that once you move in to your modular home, you have all the time in the world, and there are no more deadlines that must be met.

Some Closing Thoughts

Building a home from the ground up is truly a fascinating experience.  We would be glad to share our experiences further with you and help you decide whether or not this is right for you.

Whether you decide to build a modular home or a stick-built home on a lot that you buy or decide to buy a new home that is being constructed by a builder in a Planned Community, You should Contact Us to act as your agent through an Exclusive Righ to Represent to Buyer/Tenant Agreement.  It is a complicated process that takes quite a bit of time, energy and emotion, and it help to have someone representing you with the builder who’s been there.