What is a Mobile Home Purchase Agreement Form?
A mobile home purchase agreement is a legally binding contract between a buyer and seller for the transaction of a mobile home. The agreement’s purpose is to define the obligations of each party involved; more specifically, it clearly indicates what one party will do in exchange for something from the other party. For example, the contract may state that a seller will transfer ownership of the mobile home to the buyer in exchange for a sum of money.
In most cases there are three parties involved , the buyer, the seller and anyone who finances the property, such as a bank or other financial institution. The seller may even be the bank itself if a mortgage is involved and the seller is the bank that holds the mortgage. The buyer is the purchaser of the mobile home. Interest rates, mortgage payments and other financing options can all be negotiated.
Components of a Mobile Home Purchase Agreement Form
When using a mobile home purchase agreement template, certain key components should always be included. These components provide clarity and ensure that the transaction runs smoothly once finalized.
The basics:
Buyer and Seller Information
Basic personal details will complete the agreement template by filling in the seller and buyer information. Names, addresses, and other key contact details may be required by some states and counties.
Property Details
The item or property being purchased must always be clearly described in the purchase contract. Having a legal description drafted by a licensed real property appraiser or county appraiser should be conducted to avoid future disputes on the property in question.
Price
A condition precedent to any real estate transaction, the price will also establish that the buyer is aware of the amount owed. The price can be broken down into down payment and balance, if applicable. Mobile home purchase agreement templates can also include a list of the items that are included in the total price of the sale, whether they are such items as appliances or feature items.
Conditions
The purchase price can also be subject to conditions, such as financing or the buyer completing the purchase within a given time, usually within 90 days. Other conditions can include the closing date, which are common for traditional real estate properties, and non-financial conditions such as subject to easements. It is important to be clear about what expectations you may have for the sale of the property.
Legal Considerations for Purchasing a Mobile Home
In the context of mobile home transactions, there are several state-specific legal requirements that must be fulfilled. These may include the following:
- Affidavit of Affixation – If a mobile home is to be permanently affixed to land, an affidavit must be filed at the county recorder’s office. Kentucky law requires that a transferor complete an Affidavit of Affixation and File it with the County Clerk when selling a manufactured home that is to become real property.
- Sales Tax – Kentucky does not charge sales tax for the sale of used mobile homes which are not upgraded or otherwise improved new or used mobile homes. Kentucky law currently adds a 6% state tax on the sale of new mobile home, which is not assessed for used mobile homes. However, some jurisdictions allow local governments to assess a 1% local option tax on the sale of used mobile homes. For additional sales tax information, see the article entitled "Consumer’s Guide to Ohio Sales and Use Taxes" by the Ohio Department of Taxation.
- Written Contract between Seller and Purchaser – The relationship between seller and purchaser should be governed by a written agreement. While we often use the standard purchase agreement (see free download), each transaction can be drafted to suit the needs of the transacting parties.
How to Modify a Mobile Home Purchase Agreement Form
When personal circumstances or property conditions vary from a mobile home purchase agreement template, it is often possible and appropriate to modify the terms of that template. For example, a template may call for the seller to make certain repairs that the parties have agreed are unnecessary. In those situations, it is possible to customize the template so that it does not require the seller to make those repairs. Similarly, if repairs are required that are not specified in the template, the parties can change it to require the seller to make those repairs.
A mobile home purchase agreement template usually contains common clauses that can be modified when necessary. If the buyer needs to put a deposit down with the agreement, it might not be clear if any payment is refundable if the sale falls through for some reason. A clause can be added or modified to specify that the deposit is non-refundable or, conversely, that it is refundable under certain circumstances.
Another modification that is possible in some circumstances is including a clause that makes the contract subject to approvals by lenders, apartment associations or the mobile home park. These contracts usually involve all cash offers, so, if the mobile home is sold with financing, the buyer should be allowed to specify where they want the loan. Similarly, if the mobile home buyer is buying land or renting a lot, there can be a clause that makes that purchase or rental agreement a condition.
Pitfalls of Mobile Home Purchase Agreement Forms
When we talk about common errors in mobile home purchase agreements, it’s a mixture of errors on the part of both buyers and sellers. I have been involved in transactions where buyers and sellers each made significant mistakes, but also in transactions where their errors combined to create a recipe for disaster. Let’s start with the buyer.
One of the biggest problems I’ve observed in my twenty-five plus years in this business is buyers who decide not to use a Florida mobile home purchase agreement template because they want to figure it out themselves. Thinking you can purchase a mobile home without a mobile home purchase agreement template is like thinking you can play chess without knowing the rules of the game. You need to know how the game is played in order to have any chance of winning the game and the rules of any game are contained in its agreement.
Some buyers think they can simply agree with the seller as to how to fill out various parts of a mobile home purchase agreement template. This can be the reason various parts of the agreement are incorrectly filled out. If there is any dispute with regard to what the buyer and seller agreed to, the agreement will control and the dispute will be resolved as the agreement provides, not as the buyer and seller thought it should be resolved. One party can’t arbitrarily change the agreement to say something other than what it says.
Some buyers also like to use "as is" language with a mobile home purchase agreement template. The "as is" language is generally used when one party is not as familiar with the property being sold as the other party. The seller is looking out for his own interests and will not usually alert the buyer to potential problem areas. In simple terms, if the buyer elects to buy the mobile home "as is," the price of that home will be reduced by what the buyer believes the cost of the repairs will be. The seller will not worry about the condition of the home or the cost of any repairs because he no longer owns it. You, as the buyer, will become responsible for all repair costs as soon as the agreement is signed and you will also be responsible for any costs in detecting hidden defects in the home.
I have also seen buyers take a purchase money mortgage or security deed improperly. This is usually done by the seller filling out a part of the mobile home purchase agreement template and then the buyer filling out the rest of the template. This type of transaction should always be done between the buyer and seller with the use of a mobile home purchase agreement template because the buyer’s financial information must be captured in order for the seller to determine the amount of the payments and the interest rates to be used in the purchase money mortgage or security deed. However, the buyer’s financial information is missing from the mobile home purchase agreement template, so his payments may be based on the maximum amount the seller can receive under the state usury limit or an amount that the buyer can’t afford to pay . Either way, what should have been a simple negotiation in person or by phone, will turn into a loss of the sale and possibly litigation if the buyer tries to collect his deposit money.
Some buyers just completely forget to have a deposit to hold the mobile home for them during their negotiations with the seller. A mobile home seller may have more than one buyer he is negotiating with at any given time and will sell his mobile home to the first buyer who pays a deposit on his home. And as I said earlier, the seller isn’t going to worry about what problems the buyer discovers because the seller already has the deposit money.
From the seller side, the seller also has rights and responsibilities when selling a mobile home. Usually the seller is only interested in getting his money and moving on. He does not have any obligation to tell the buyer about known defects, but if the seller has someone repair the home and the bill comes to him, he can’t make the buyer responsible for that repair without first disclosing it and giving the buyer the opportunity to pay for it. The buyer can’t be responsible for additional repairs that were never mentioned during negotiations. No one wants a six-year warranty on a leaky roof and no one is going to pay for it either.
The seller also has rights if the buyer violates his part of the mobile home purchase agreement template. Although the most likely lawsuit would be for specific performance, an action in fraud can be used as a remedy for damages the seller has incurred because the buyer misrepresented certain aspects of his offer to buy the mobile home. Although the seller seldom incurs damages when the buyer doesn’t perform under the agreement, damages for wasted time can be considered.
Sadly, sometimes the buyer takes possession of the mobile home and doesn’t perform under the mobile home purchase agreement template. Or worse yet, the buyer doesn’t have any money to pay for the mobile home and the seller gives the buyer the opportunity to call the lender and see what might be available on a loan. The buyer enters into an agreement with the lender for the loan and then doesn’t tell the seller about the contact with the lender or the loan terms. With some lenders, the mobile home is repossessed and the seller ends up making monthly payments to the lender through a deficiency judgment action against the buyer. Other times the buyer enters into a caveat emptor arrangement with the lender and the seller becomes responsible for a lien against the mobile home. This can happen very quickly and the seller can end up paying for the loan, even if he never recovered possession of the mobile home.
If you’re buying or selling a mobile home, make sure to use a mobile home purchase agreement template to protect yourself. A good custom mobile home purchase agreement template from a qualified attorney is worth every penny.
Where to Locate Mobile Home Purchase Agreement Forms
When seeking reliable mobile home purchase agreement templates, it is wise to turn to reputable sources. Online legal service websites, such as LegalZoom or Rocket Lawyer, can be helpful, but it’s important to ensure that any agreements come from a source reputable in the real estate industry as well. Industry professionals who manage mobile home parks or who are actively involved in buying and selling manufactured homes are typically well versed in the particulars of mobile home transactions and the corresponding documentation.
Scott Ringeisen, a manufactured home investor and owner of MHProNews.com, recommends finding purchase agreement templates that specifically address the "land home" aspect of mobile home purchases. James Smith, a licensed mobile home dealer in Los Angeles County, has provided a sample "land home" purchase agreement template on his website, TheLAHomeGuy.com, which is a great starting point for buyers and sellers to use as a baseline when drafting their own agreements.
Texas Mobile Homes, an association representing mobile home dealers in Texas, offers a free download of a mobile home purchase agreement template on their website, which includes optional seller or buyer financing, as well as language to address septic or aerobic systems. The template is designed to conform to Texas laws and is a good general framework for those in the mobile home industry.
Independent legal counsel is of utmost importance in any mobile home transaction, but particularly when creating mobile home purchase agreements. These attorneys should have expertise in real estate law, land use law, and have experience dealing with mobile homes to ensure the buyer and seller are properly protected throughout the transaction process while remaining in compliance with state and federal law.
The Purpose of Legal Counsel in Mobile Home Purchases
It’s important from a consumer protection perspective that the mobile home purchase agreement is drafted correctly. While it is possible to negotiate directly with the person selling the mobile home, many sellers use a form document such as the RPI Form 143 Mobile Home Purchase Agreement. Even when a seller does not use a form agreement, a legal professional could help interpret an existing purchase agreement. This is desirable when the buyer relies upon marketing information in addition to the purchase agreement, such as a brochure, advertisement, website or visiting sales office. Although these advertisements may have originally been correct, new, more restrictive laws may now limit certain representations. For example, any restrictions to the use of a pet by the new resident must be in the purchase contract , with a 1- to 10-word description of the site restriction. Otherwise, the buyer is not bound by the restriction. If the contract is unclear, the ambiguity will be construed against the seller and in favor of the buyer. Whatever the marketing materials say about pets, the site restrictions are what matter. A legal professional will ensure restrictions imposed on the pad upon transfer are legal. Once satisfied, advising the buyer to adhere to the pad restrictions. The buyer should insist on using a form of purchase agreement and not a variation of one, such as a sales receipt. If a sales receipt is used rather than a purchase agreement, upon the purchaser acquiring the title, the title is not valid and problems arise insuring the transfer.