No matter how many home shows you watch, or how many Pinterest boards you browse for inspiration, there’s always something thrilling about finding the right home. Once you do, the next step is usually negotiating with the seller to make sure you’re getting the best possible price on your dream home.
But what if there was another way? What if you could skip all of that and buy a custom or spec home instead? Sounds great, right? But is it really worth it?
This post provides answers to the what is a spec home question, and we’ll also explore the pros and cons of buying one. So whether you’re just starting your search or you are already deep in negotiations with a seller, this article will come in handy. Keep reading to learn more!
What Is a Spec House?
Essentially, a spec house is built with the intent of selling to a buyer without major customizations or specific changes requested. In some cases, these houses are also referred to as “builder’s homes.”
A spec home is typically move-in ready and sounds like an ideal option for many. However, several home buyers often underestimate a spec home’s value because they believe builders will not build to suit their needs.
Surprisingly, quality home builders typically strive to meet buyers’ expectations with their construction, designing new houses that fit what people want in terms of interior design, paint colors, curb appeal, and more.
They also consider how much a house will cost after completion and other things like landscaping. Finally, they ensure affordability so sales happen quickly without sacrificing quality.
How Much Does a Spec House Cost?
A spec house’s cost can vary depending on various factors. The size and location will affect the final price, but it isn’t uncommon for homes in this category to approach $1,500 per square feet or more!
Whichever spec house you opt for, it’s essential to engage a competent home builder who’ll provide you with a good deal for your money.
A qualified real estate agent is crucial in any successful home purchase. They’re there to negotiate on your behalf and help with inspections and paperwork, keeping you informed about things that could save months or even years off the timeline for closing the deal!
Buying a Spec House
Buying a spec home is usually faster because it saves time you would have spent scouring for pre-sale or custom buildings. You can move into your new house quicker than with other construction projects!
A custom home’s construction, on the other hand, can take anywhere from nine months to one year, depending on the expertise and complexity in building it.
When buying a house, familiarize yourself with the local housing trends, get a real estate agent to help you with the proceedings, and find a suitable mortgage to finance the purchase. These vital preparations will positively impact your home buying process.
When Should You Purchase a Spec Home?
There’s no specific season to buy a spec building since they’re always available. You can start hunting for offers as soon as you have enough funds to make the purchase.
However, it’s common knowledge that homes are generally more available and cheaper in the fall. If you’re looking to spend less on a home, consider waiting for the fall when builders are more likely to negotiate and offer better deals.
Who Constructs a Spec House?
As mentioned earlier, sellers usually hire a builder to construct a spec home. These sellers are responsible for financing the home building process, and they profit when they sell these properties.
Since spec home builders build purposely to sell to potential home buyers after construction, they invest resources into erecting a building that fits the real estate industry’s current demands. The home builders prioritizes finding the perfect location, land, and materials to develop an attractive structure for potential buyers.
Sometimes, buyers can influence certain aspects of the property’s construction, including the interior design, floor plan, painting, curb appeal, and other essential features of the home. However, this influence is minimal since the lack of control sets spec houses apart from custom buildings.
Alternatives to Spec Homes
Earlier, we answered the question: “what is a spec house?” However, it may not be the best solution for everyone in the market for a new home, so let’s explore alternatives to spec homes.
The most common alternative to a spec house is a custom home. As its name implies, builders erect these structures to cater to specific client requests. The client hires contractors who listen to their idea of a perfect home and try to build it from the ground up.
A custom house is the best option for someone looking to own their dream home. Instead of buying what the builder thinks is a good fit for the real estate market, the buyer gets to have a say in the architectural design, budget, interior decorations, and other essential options.
A critical disadvantage of custom homes is the construction speed. In a spec home, you can own a new house as soon as you find a listing you like, but you’ll have to wait through the entire construction process if you’re building a custom home.
Try a semi-custom home for a mix between a spec and custom home. Semi-custom homes aren’t built from scratch, but they’re not complete buildings either. The builder combines the existing plan with your idea of a perfect home to construct something semi-customized.
Spec Homes or Custom Homes: Which Is More Expensive?
A custom house is more expensive when comparing homes of similar sizes and structures. However, this may be applicable only during the initial purchase. Since individuals are responsible for making critical decisions when building a custom house, they tend to go out of budget.
Builders constructing spec houses are more likely to stay within budget while ensuring that they develop a design that’ll sell quickly. However, a spec home may cost more in the long run if the homebuyer decides to renovate the building to suit their style.
Spec Homes or Custom Homes: Which Has a Better Resale Value?
It’s important not to overlook the resale value when you’re looking at properties. Reselling homes has become more prevalent in recent years. This trend means spec houses stand better chances of attracting potential buyers because contractors build them specifically for a broader audience, rather than just one person or family who orders everything from scratch.
Pros of Buying a Spec House
Spec homes benefit you in numerous ways. Since you’re buying a new home, builders will pay attention to the littlest details, so you can expect a home with delicate interior designs and aesthetically pleasing features. That said, here are some other advantages of purchasing a spec home.
As mentioned earlier, you’re buying a new house, and you won’t need to carry out any major repairs or renovations. Since you would’ve toured the property before purchase, you get to move in without worrying about significant repairs or renovations.
It’s also possible to purchase an incomplete spec home at a lower price so you can shape the house to suit your specific style. Either way, a spec home is always new construction.
Freedom of Choice
You’re in charge when it comes to finding the perfect property. If you’ve got your sights set on a specific neighborhood or type of home, an estate agency can provide countless options across different locations.
The fact that spec homes are more affordable than custom-built homes doesn’t mean builders use inferior materials to erect them. The houses also need enough appeal for potential buyers, so they come with features like shiny exterior paint jobs and spacious layouts!
Opting for spec homes would be a feasible and well-thought option if you want to save money.
The following section analyzes some of the cons of a spec house.
Cons of Purchasing a Spec Home
The most significant disadvantage of purchasing a spec house would be choice limitations. Since contractors build the home to satisfy the general public’s demand in a given market, it might be challenging to find a spec home for people with unique style needs.
Also, your home might be similar to most other houses in the area. Likewise, a spec home might include unwanted features that may drive up costs unnecessarily.
However, you can buy an almost complete spec house and shape it to meet your specifications. Suppose a prebuilt home is all you need, most of these concerns shouldn’t apply to you, as you’ll likely find a way around them.
Tips for Buying a Spec Home
A competent agent is instrumental to the success of your home buying process. A good real estate firm should provide you with innovative search tools, qualified agents, and the best prices to ensure you get your dream home.
Also, spec homes are new, but they aren’t necessarily move-in-ready homes. Hire an independent home inspector for an effective inspection.
Lastly, identify what you need in a property and communicate this to your agent. Being specific in your decision-making will make the process easier so you can get a new home that meets your requirements.
Spec homes may not be your best bet if you’re out for your dream home, but they’re trendy among builders. By going for a spec house, you can skip the lengthy waiting process while your new home is under construction since they’re generally move-in ready.
However, before buying a spec home, it’s crucial to learn a thing or two about them and how they differ from the other opportunities on the market. An excellent place to start might be getting an answer to the “what is a spec house?” question before moving to the pros and cons of purchasing one.
Have you decided to buy a spec home rather than build a custom house? The next step is finding the best spec houses listed in your favorite location. As the leading real estate agency in Texas and other parts of the country, Homes by Ardor has extensive listings of affordable properties that are guaranteed to suit your budget and needs.
Browse through our network today to find your dream spec home at the best price.
Kris Reid is the CEO of Ardor SEO, a company that helps real estate professionals get more leads and customers to predictably grow their business.
Over the years, Kris acquired extensive knowledge of SEO and its practical applications in various industries, with the main focus on real estate.
In 2021 Ardor launched the Icons of Real Estate Podcast to share proven strategies from the top producing icon agents with the real estate community.
After obtaining the real estate license in 2022, Kris joined eXp Realty and launched Homes by Ardor, the platform that was built to be the fastest way to buy or sell a house. Homes by Ardor also provides leads for its partner companies and realtors.