A mobile home, also known as an RV or a trailer, is a very cheap option when looking for housing solutions. Many people are also attracted by the fact that you can move around whenever you feel like it. If you are interested in buying one, we want to help you in the process. With that in mind, here is your guide to mobile home purchase agreement.
Parties and premises
The process happens between the buyer and the seller under the premise that the buyer agrees to purchase and the seller agrees to sell. The agreement states that the seller is selling a mobile home with improvements, fixtures, and additions made to it in the past. If you wish to purchase a perfect mobile home, inspect it well and see what fixtures come with it. Then hop in and check out why singles love Miami!
The description of the mobile home
Every agreement must have a complete description of the mobile home. Here is a list of the necessary information:
- Manufacturer
- Year of manufacture
- Model number
- Approximate size
- VIN number
- AZ certificate of title number
- Accessories
- Location of the mobile home
- Name of the mobile home park
- Address of the mobile home park
Determining the purchase price
The total purchase price consists of two parts, the purchase price set by the seller and added taxes and other fees. When buying a mobile home, have this in mind, and check how much the taxes and additional charges are before you commit.
Payment terms
The usual terms include a Cash payment, Conventional loan, FHA, VA, Assumption, or Seller Carryback.
In case the buyer pays in cash, the entire sum must be paid in US dollars.
- The Conventional loan is not backed by a government agency, which means that you are getting a mortgage loan from a financial institution like a bank or a credit union.
- FHA loan is insured by the Federal Housing Administration and issued by an approved lender.
- VA loans are only available for military members, surviving spouses, and veterans.
- With the Assumption loan, you have one borrower that will take over your existing home loan.
- Seller Carryback loan is when the seller acts as a bank and lends you a second mortgage that you pay together with the first one.
If there are other payment methods, they need to be stated in the agreement.
Earnest Money requirements
Earnest Money is a deposit that you pay in advance as a confirmation of the contract. If you are buying an old home, this is not a necessity. However, if you are purchasing a new one, it becomes a requirement.
If the Earnest Money is not waived, the buyer needs to deposit it to a dealer or broker trust account. If it is a new home, the buyer must deposit it into an escrow account. The payment method is usually in the form of a personal check or wire transfer, but there are other applicable methods.
When it comes to an escrow account, have in mind that the buyer will cover all additional charges. The Escrow account closes when the buyer gets the title of the owner.
Finding the right community
Before you purchase a mobile home, think about finding the right mobile community for you. This is important because you must obtain approval to live within that community or association. Check out some places, like Fort Lauderdale for a nice community. You need to submit an application to the manufactured housing community for approval before entering into the contract. There is also a deadline of five days after the contract acceptance, so you have a bit more time to get the application approved. If you don’t get the approval, the contract is canceled, and you get the Earnest Money back.
After the contract is closed and you become the owner, you will also need to start the move-in process. It is good to speak with the moving experts from the neighborhood and start planning your relocation on time.
Seller’s requirements
The seller is obliged to deliver all possessions like existing keys and anything else necessary to fully operate the mobile home. This also includes all personal properties within the mobile home, like a refrigerator, washer, dryer, etc. Make sure your storage needs are also met, especially if you have a lot of books.
Loan contingencies
To get the loan, the buyer must provide their name, income information, premises address, social security number, the estimated value of the mobile home, and mortgage amount. The buyer also must give full access to their Residential Credit Report. The deadline for loan approval must happen no later than one week before Closing the Escrow account. If the buyer and seller agree on a different deadline, that must be defined in the contract.
In case the Loan contingency is unfulfilled, the contract is canceled. The buyer has the right to get the Earnest Money back if they did everything possible to obtain the loan approval. However, all the process taxes and fees will not be refunded. Keep in mind that an unfulfilling loan contingency is not a breach of the contract.
Breaching the contract
There may be a breach of contract, either by the buyer or the seller. It is crucial to state what happens in case of breaching the contract.
It is also common to set a cure period, where the party that breached the contract has an opportunity to cure it. If that party fails to cure the agreement, the other party will deliver the final notice to the non-complying party. Upon receiving the final notice, that party has three additional days to cure the contract.
If the contract is breached, the non-breaching party has the full right to cancel the contract and start a dispute.
Guide to mobile home purchase agreement explained
We hope that this guide to mobile home purchase agreement gave you useful information that will encourage you to enter this process. Keep in mind that it is necessary to speak with your real estate agent and lawyer on the fine details of the agreement and any other points of interest. Purchasing any property is a challenging process, so do your math before you step into it. Good luck!