What should I check before buying a modular or tiny home dealership?

A modular or tiny home dealer sells homes that someone else builds. Ask whether the right to sell a brand, the buyers lined up and the people who place and finish each home stay with the business. A buyer of the dealership should look at those links first, because any of them can change when the owner does.

Manufacturer dealer agreements

Ask for every dealer agreement and read how long it runs, whether it covers a territory and whether the manufacturer must approve a new owner. Speak to the manufacturer before you commit, with the seller’s permission. Ask whether the dealer is tied to one brand, and what happens if the manufacturer changes its network.

Deposits on homes not yet built

Customers often pay deposits long before a home arrives. Ask how much is held, where it sits, which homes it relates to and how it will be dealt with at closing. A buyer who takes over the orders also takes over the promise to deliver them.

Show homes and the lot

Find out which display homes the dealer owns, which are loaned by a manufacturer and whether any carry a loan. Read the lot lease for its term and any clause on a change of tenant. This is unlike a dealership with financed floor stock, as in buying a mobile home park, where land is the main asset.

Set-up, delivery and service

• Who delivers, sets, connects and finishes each home, and are they employees or contractors?
• What does the dealer promise customers after delivery?
• Is there a list of open service calls and complaints?
• Who answers for problems that come from the factory?