Considerations when Purchasing Prefab Homes

With the rise in housing costs and the development of new technologies, prefab homes are becoming increasingly popular throughout Canada. In the past the thought of prefabricated housing usually went hand in hand with negative connotations. These days however you’ll find things have changed and while there are still $20k mobile homes on the market, there are also multi-million dollar mansions using shipping containers, quonsets and other prefab building methods.

Since this method of construction is a relatively new phenomenon few real estate agents or buyers have past experience when dealing with the purchase of a prefab home. This is one of the largest purchases you will ever make so it’s important to educate yourself on what to look for.

Prefab Home Purchase Considerations

1. Ask for a Property Condition Disclosure Statement (PCDS) – A PCDS is a legal document provided by the seller which discloses any known conditions with the property you’re purchasing. Some provinces have made them mandatory but for most, you will need to explicitly request it as a condition of sale. Most prefab homes have been built fairly recently and are on either their first or second owners so a PCDS should be fairly comprehensive and paint a good picture of any known underlying issues. Previously I wouldn’t have thought this was a requirement if a Building Inspection Report was provided, but then I read about the nightmare story here https://www.relawllp.ca/post/a-case-to-die-for. In this situation the home in question was the scene of a murder associated with organized crime. While the murder took place just outside of the residence and the sellers “thought” it wasn’t required to disclose this, the buyers were obviously dismayed when they found out and refused to go through with the purchase. A PCDS should have disclosed the murder and in the case that the seller did not include it, the buyer would have had a stronger case before a judge.
2. Get a Building Inspection Report – Even though a prefab home is more likely to be built to code than a traditionally built home (due to the standardization of construction practices at the factory), it’s important to get an expert in who can ensure everything was installed correctly on-site and that there haven’t been any issues that developed with the foundation or other elements.
3. Seasonality – When purchasing any home, the time of year you purchase can be a major factor in determining price. Typically early spring is the most expensive time to buy a house. If you are able to hold off until winter, prices will subside and homes typically do not show as well given that the yards aren’t visible under our Canadian snowload.
4. Supplier Documentation – One of the great things with prefab homes is that there’s typically a warranty provided by the manufacturer and this can protect you legally and financially in certain circumstances. Be sure to request any sale documentation from the seller and check to see if the warranties are still active and transferable

As with any home purchase, be sure to do your own due diligence and research the neighborhood, check-in with the neighbors and ensure you’re comfortable making such a significant investment. We are not legal or real estate professionals so the advise above should not be taken as legal advice. Be sure to consult professionals when purchasing your home and we hope you enjoy many years in it to come!

If this article helped you, or you’re considering a metal prefab home then be sure to let us know in the comments below.