Introduction to buying a prefab home

In this guide, you will find the basic guidelines to start the process of buying a prefab house. Prefab construction works quite differently from traditional construction given that most of the building process takes place off-site in a factory-like environment. Therefore, the step by step we should follow when buying a prefab will be unique for this type of construction.

The process of buying a prefab home:

  1. Look for a prefab manufacturer
  2. Find your plot of land
  3. Start working with your manufacturer

Understanding how prefab construction works will give you an idea of what to expect and where to start. However, keep in mind that prefab is a generic term that defines a way of building but there are different types of prefabs. Each type of prefab house offers different advantages, get to know them to choose the prefab that works best for you.

What do you need to know about buying a prefab home

Before you start the process of buying a prefab home, it is important to take some time to understand the nature of this type of construction to have a clear idea about what to look for and what to expect.

How do prefab homes work?

  • Manufacturers are quite specialised: Since prefab construction is highly systematised, most manufacturers specialise in a design style. Choosing the right manufacturer allows us to acquire exactly what we are looking for.
  • The land characteristics matter: When building a prefab house, choosing a suitable plot of land is a must to ensure a smooth construction process.
  • The design phase shouldn’t be rushed: Given that most of the construction is done in a factory-like environment, once the building works start there isn’t much margin for the owner to look at the space as it is being built and modify any design features. Take some time to decide on the design before approving it.

How much should you expect to pay for a prefab home?

Buying a prefab home is generally cheaper than building a traditional on-site built house, saving as much as 20% off the construction cost [1]. Though, the price will depend on the type of prefab; the size of the house; and the materials used. For instance, you can find economical prefab homes for a starting cost of 30,000€ for the prefabrication works. Still, a price tag of around 200,000€ is a more common value when buying a family-size prefab.

The process of buying a prefab home:

1.Look for a prefab manufacturer

Once you have decided what type of prefab home seems to work best for you, it is time to look for a manufacturer. Given the nature of the prefab process; it is important to choose a prefab builder based on the following:

  • Type of prefab: Find a manufacturer who builds the type of prefab you are looking for.
  • Style: Prefab manufacturers tend to specialise in one architectural style, define what aesthetic best suits you and look for a manufacturer who focuses on that style.
  • Pre-designed or customised: Some manufacturers offer pre-designed prefabricated homes, some focus on custom designs only and a few offer both options. Decide if a predesigned floor plan is good for you or would rather design a house from scratch before settling on a manufacturer.
  • Delivery: Make sure that the manufacturer can assure the shipment to your country.

2.Find your plot of land

Look for a plot of land to build your prefab house and consult with your manufacturer before purchasing it. This consultation allows you to verify that the land is suitable both on the legal and on the physical aspects to build the type of prefab that you have in mind.

As a general rule, these are the most important things to consider when buying land to build a prefab:

  • Flat topography: Some prefabricated houses, especially those that are predesigned, require a flat surface to be raised.
  • Accessible roads: To ensure all the prefabricated components can reach the property, the roads leading to the plot should be wide and obstacle free.

3.Start working with your manufacturer

As soon as you start working with your manufacturer you begin designing the prefab home and defining the building process with the different professionals involved. Every company and every country follows slightly different processes so it is important to take your time discussing all the important aspects of the building process with your manufacturer.

These are some of the most important things to consider:

  • You might need to hire a contractor: some manufacturers take care of both off-site and on-site construction, though others only focus on the house prefabrication. In this case, you will have to hire a contractor to carry out all the on-site works such as building the foundations, landscaping, and connecting to the site utilities.
  • You might need to hire an architect: In some European countries, such as Spain, in order to obtain the building permits, you will need a registered architect[2]. Some prefab companies might include this service, clarify with them what is included.
  • You will most likely need to apply for a building permit: All prefabs, except most tiny homes, need a building permit to be built. In most countries, such as the UK, it is the owner of the property who has to apply for this permit[3]. Your architect will prepare most of the documents for you but it is your responsibility to obtain the permits that will allow you to build.buying a prefab home

What type of prefab should you buy?

There are four main types of prefab houses. Each one of them follows a different construction process which translates into advantages as well as inconveniences depending on our expectations, needs, or preferences.

Modular houses: You can get a construction that looks just like an on-site built house with either a modern or a traditional look. Since modular homes are built by joining prefabricated three-dimensional modules, the assembly of the house is fast and easy. However, a modular house might not be a good choice if the roads leading to your property aren’t accessible by the lorry of great dimension required to transport the modules.

Panel-built houses: By acquiring this type of prefab, we also obtain a house that looks just like a traditional construction of our preferred style. In this case, however, the prefabricated compounds aren’t volumetric but flat: a set of panels designed as walls, roofs, and ceilings. This translates into an assembly that isn’t as fast, though the delivery is often more flexible and a narrower road might not disrupt it as much.

Log houses: Logs can be entirely prepared offsite and then transported to the construction site as a ready-to-assemble kit. So buying a log house can be a good option if the access road leading to your plot is complicated.

Tiny Houses: A tiny house is a unique type of prefab that is small but also moveable. It is built entirely off-site and usually placed on wheels which makes it a great option if you are looking for a flexible and minimal lifestyle where you don’t permanently place the house on one specific plot of land.


Is a prefab house a good investment?

Yes, if you are planning to invest in the construction of a house, choosing to build it using prefab construction is a smart idea. The quality of prefabs is as good as the quality of traditional built but the expense required to build it is lower. Therefore, building a prefab house is a good investment.

Do prefab homes lose value?

Permanent prefabs such as modular, panel-built, log homes, or cabins are considered real estate and built up to the same quality as traditional construction. Therefore, they generally do not lose value.

How do I make my prefab house Mortgageable?

A prefab house is mortgageable if it is raised on permanent foundations and built up to the local building codes. Generally, prefab construction such as modular, panel-built, or log houses can easily obtain a mortgage.

[1]Bertram, N., Fuchs, S., Mischke, J., Palter, R., Strube, G., & Woetzel, J. (2019, June) Modular construction from projects to products Capital Projects & Infrastructure
[2]Everything you need to know before buying a prefabricated house in Spain Pacheco & Asociados
[3]Your responsibilities Planning Portal

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