Ask Cynthia: Is Escrow for Mobile Homes Similar to Resale?
Feb 7, 2018 / Ask Cynthia
I talked to you awhile back about mobile homes when I had a client considering them. I so enjoyed talking with you and learning more about them. Now I have a client who wants to sell her mobile home. Is escrow for mobile homes similar to resale? What should I be aware of? What are the approximate closing costs?
Thank you for thinking of me! Mobile home escrows are similar to regular homes in some respects, and not in others. The biggest differences are:
- To open escrow, we need a copy of the seller’s existing title or registration, at the very least their DECAL number, which is three letters, and four numbers long.
- Escrow needs contact information for the Mobile Home Park Manager.
- An offer should be written on the MHPA (Manufactured Home Purchase Agreement), not the RPA
- No title insurance
- No HOA (the park is a lease, not an HOA)
- No Transfer tax
- Title transfer is with a state agency known as HCD (Housing and Community Development). This takes place AFTER closing, and can take 3 to 4 months before the buyer gets title to the mobile home.
- No notarized grant deed from the seller is required, but there are specific HCD documents that will be prepared by escrow, and need to have original LIVE INK signatures by buyer and seller for closing.
- The buyer needs to apply for approval from the mobile home park as soon as possible.
- Mobile home loans take typically 45 to 60 days to close.
- In the majority of escrows, Escrow needs to obtain a tax clearance certificate from County Tax Collector before the escrow can close, depending on the County, this can take three weeks or more.
- Some mobile homes are not taxed by the local County, and tend to close a little more quickly but require sales tax on the “blue book” value of the mobile home, which is different (typically less) than the sales price.
Other than the items above, the escrow process is similar to regular escrows:
- Escrow instructions and other documents are signed by buyer and seller.
- Mobile homes typically have termite reports, home warranty and NHD reports.
- Buyer has contingencies including home inspection and park approval, new loan approval, appraisal, etc., depending on the terms of the purchase agreement.
- The disclosures the seller provides are similar to regular homes.
- Buyer’s closing funds must be wired to escrow.
- Loans are processed in a similar manner to regular homes, but there is no TRID (Closing Disclosure) requirements, and closing takes place the day of funding since there is no recording or title insurance.
As far as your request for closing costs, we can give you a net sheet, if you provide the sales price, commission amount and if the seller has a home loan, the approximate payoff.
If you have more questions, please don’t hesitate to call, we look forward to working with you!