One of the first things that will need to be decided before purchasing a brand-new home is whether you want the turnkey benefits of a spec house, or if you want to choose all the options and amenities to create the custom-built home that your dreams are made of. We will compare the differences between spec houses and custom homes as well as examine some of the obstacles that must be acknowledged and overcome before either option is completed and you are able to move into your new home. By the end of this article and with the help of other articles that can be found on this website, we hope you will be able to make an educated decision on which option is the best for you. As well as develop a better understanding of the home buying and building process.
Cost consideration
Spec homes have gotten their name because they are built upon speculation, hence the name spec houses. They are built without any specific buyer in mind, but with the intention of appealing to a broad group of potential homebuyers. The builder constructs the house in a way which they believe will result in the quickest turnout. We have all seen the rows of spec houses planted side by side, filling up the subdivisions.
This is what comes to mind when you hear the term spec house. However, spec houses can be large, expensive, ornate homes that a builder has invested millions into with the hopes of selling it to the right buyer. If it was built to be sold with a broad range of buyers in mind, and not for one specific buyer, then it is considered a spec house no matter the cost. Although most of the spec houses you see are cookie cutter homes, built off the plans that the builder has already developed, with similar finishes, floor plans, and lot sizes to the other houses previously built.
Spec houses are commonly built with the builder using their own funds or the funds of an investor to complete the construction of the spec home. Compared to a custom home, spec houses are generally cheaper because the builder chooses more economical options that will be the most appealing to a wide group of buyers.
A custom home buyer may want a Carrera marble island top, while a spec home may come with a much more sensible quartz island top. Appealing to a wider range of people by being a cheaper option and requiring less maintenance while still being a durable stone countertop.
Ability to customize
Custom homes are exactly what the name implies, they are built to the buyer’s custom specifications. This could mean that the buyer has designed the project from the ground up, or that they have taken the plans that they found and had them customized to how they wanted them.
This is a much more involved and usually more expensive option for the buyer but comes with its own advantages. Custom homes, when financed, generally require the home buyer to obtain a construction loan. The buyers are paying the contractor to build the home they want instead of the builder fronting the money and risking whether the home will sell quickly or not.
This route allows the buyers to pick out all their own finishes as they go instead of walking into an already finished home without the advantages of personal selections. With a custom home the buyer can customize almost every aspect of the home from floor tile, paint color, to ceiling height.
Amount of work involved as a buyer
Buying a spec house takes a lot of the leg work out of the process for you as the buyer. The contractor has already had an architect draw up the plans, found the land, cleared the land, dealt with any other issues on the land such as tree removal, soil testing, building demo, and acquiring permits.
They have brought the job to completion or near completion and now it is ready for purchase. Spec houses are generally bought as is at the end, once it has been completed. Sometimes they can be purchased shortly before it’s finished, and the builder will allow the buyers to make small decisions such as paint colors, flooring styles, and some other minor finishes.
This option may result in more charges being added to the final price. If you buy a custom home then you will likely oversee picking out the land, hiring an architect and an engineer to draw up and approve your home plans, making all the architectural decisions before a blueprint can be drawn up, picking out all the finishes yourself, deciding what to do as problems arise, and so much more before the project is completed.
Amount of time it takes to build spec home vs custom home:
Another thing that you will want to consider is the time that it will take before you can move in. With an already completed spec home with financing, it may be as little as 45 to 60 days for you to close on the home and start moving in.
If you are purchasing a custom-built home, then it will easily be at least 6 months before you will be able to begin moving in. Custom homes generally require the home buyer to acquire a construction loan which tends to be more difficult to obtain than other loans. Buying a spec home will give you more options on which loan you will be able to receive. FHA insured loans and conventional loans are a couple of popular loan options for home buyers.
Whether buying a spec house or looking at designing a custom home, it is important to consider it from all angles. You should meet with your builder to make sure their style and quality of work is up to the standard that you want to see.
This can be done by looking at their previous builds and seeing if they have any online reviews from previous customers that you can read. A proper builder will be able to guide you through the process and help you make decisions. While a less qualified builder may cut corners by using cheaper materials, they may not quality check their subcontractors, and allow poor craftsmanship to go unnoticed.
In conclusion you have been given information in this article referencing your loan options, budget, time frame, and personal preferences. With this information you are one step closer to making your forever home dreams come true. We are excited to have the opportunity to work with you!