Since a modular home is built to meet or exceed the same standards as a home built on site, it should appreciate at the same rate as a comparable site-built home. Unlike manufactured or mobile homes, a seller of a modular home does not have to keep a state or federal insignia on the home stating that it was built in a factory. The national appraiser’s guideline does not have a designation for a modular home versus a site-built home. Each are permanent, regular homes. Fannie Mae’s “Selling Guide: Factory-Built Housing: Modular, Prefabricated, Panelized, or Sectional Housing” explains the appraisal and comparable property requirements when an appraiser values a modular home.
The state of California considers a modular home, known legally as “Factory Built Housing,” to be fundamentally the same as a home built on site. The legal department at the California Department of Real Estate (DRE) has said that if their lawyers were real estate agents in the field, they would not disclose that a home was built using modular construction methods at resale, because you only disclose negative items.
A modular home is simply a “Single Family Residence.” Future sales of the developed property will be registered as fee-simple real estate. From a legal standpoint, the only difference between modular construction and stick-built construction is during the construction phase. At completion, each construction method renders an equal home from a legal, regulatory, insurance, and appraisal standpoint.
A home built on a more modest budget will look like a stick-built home built on a modest budget, and a home built on a larger budget will look like a custom stick-built home built with a larger budget.
This home that we built sold almost immediately and at a premium in Palo Alto in the Silicon Valley, California.