I’ve recently established one of my firms as a newly licensed manufactured/modular home dealer in western North Carolina. The primary objective of going through the process was our need to sell 50-60 new homes to residents of a new affordable housing MHC called Eagle Park. The first home will be installed in the May/June timeframe for use as an Eagle Park model home and sales office.
We plan to keep it simple and offer new Eagle Park residents a limited portfolio of 2-3 specific home configurations and decors when they reserve their lot. Each home will be a 3/2 double wide in the 1,500 SF range. Delivered and fully-installed end user sales prices will run between $170-190K.
Now that we’re almost ready to publicly announce the project I’m putting together a plan for working with local real estate brokers and Realtors. I found a few helpful posts on this topic here, but I’m interested in hearing updates and/ideas based on the latest market conditions (hot) and industry sales norms.
So far it looks like we have following options for working with Realtors, depending on whether we decide to rent or sell the lots with the homes. Both business models are attractive and both offer comparable investment returns.
If we sell the lot with the home (real estate transactions):
Option 1 - use the typical Realtor listing process, select a preferred Realtor/broker to lead the sales process for all new homes, pay a total sales commission in the normal 6% range, preferred Realtor splits the commission with a buyers agent if a third-party buyers agent is involved. Use a standard real estate purchase contract with home buyers. Closings must be conducted by a NC attorney.
Option 2 - Same as Option 1 but limit the commission amount to 3% if only the preferred Realtor is involved with no separate buyers agent.
Option 3 - Use either Option 1 or 2 but limit preferred Realtor commission to 1.5 - 2% given the commitment to give them 50-60 exclusive listings.
Option 4 - Use an “open listing” process where we pay a standard 3% sales commission to any Realtor who brings us a buyer. No exclusive listings.
If we rent the lots using the common MHC business model (homes sold as personal property):
Option 1 - Pick a preferred Realtor as described above, require 1-2 of their sales team members to get their MH salesperson license (different process than dealer license in NC), designated reps can take orders, pay 3% or 6% as described above depending on 1 or 2 agents involved. Use standard NC mobile home sales contract form. No closing attorney is involved.
Option 2 - Same as Option 1 but no requirement for salesperson training, pay a standard referral fee to one or both agents.
Any comments or other ideas?