The housing market is always changing, and one trend that’s gaining popularity is the “spec home.” These homes offer something in between buying a pre-owned house and building a completely custom one.
Spec homes are appealing because they’re move-in ready and require less direct involvement in the construction process. This can be a huge plus, especially in today’s competitive real estate landscape where time is of the essence.
If you’re considering buying a spec home, you’re probably wondering what it’s really like. This article will give you a complete overview, including the pros and cons, how much they cost, and what to keep in mind before you sign on the dotted line. We’ll help you decide if buying spec houses is the right move for you.
What is a Spec Home?
A spec home is a brand-new house that a builder constructs without having a buyer lined up in advance. The builder is speculating, or guessing, that the house will have broad appeal and sell fairly quickly once it’s completed.
Key Characteristics of Spec Homes
Spec homes are often built to a higher standard than you’d see in a tract home, and they’re often located in desirable neighborhoods with high-end finishes. Construction time is also generally faster — somewhere in the range of 4 to 7 months.
Spec Home vs. Other Home Types
Spec homes aren’t the same as custom homes, which are built to a buyer’s exact specifications. Nor are they tract homes, which are mass-produced in large developments. And they’re not model homes, which are display homes used to showcase all the options a builder offers.
What are the advantages of buying a spec home?
Spec homes have a lot to offer, especially to buyers who want to move in quickly and who don’t necessarily want to be deeply involved in the design process.
Move-in readiness and convenience
One of the biggest advantages of buying a spec home is that you can move in right away. You won’t have to wait for months while the home is being built, as you would with a custom home.
Spec homes are a good option for people who prefer a hands-off approach because you won’t have to make a lot of design decisions. The builder has already chosen the finishes and fixtures, so you can just move in and start enjoying your new home.
Reduced risk and predictability
When you buy a spec home, the house is already built, so you can see exactly what you’re getting. This reduces your risk compared to commissioning a custom home, where you have to make decisions based on blueprints and samples.
Buying a spec home can also be a faster way to become a homeowner, especially in competitive markets where custom construction may be slow.
Opportunity for limited customization (sometimes)
If you get in early enough during the construction process, you may be able to make some limited upgrades or modifications to a spec home. This can give you a degree of personalization while still enjoying the convenience of a spec build.
Examining before signing
When you buy a spec home, you can thoroughly inspect the finished product before you commit to buying it. This allows you to assess the quality of construction and finishes and make sure that the home meets your needs.
Disadvantages of Buying a Spec Home
While spec homes can be a great option for some, they also come with certain drawbacks that are worth considering before you sign on the dotted line.
Limited Customization Options
If you’re dreaming of a home tailored precisely to your tastes, a spec home might not be the best fit. Unlike custom homes where you have a say in every detail, spec homes offer limited opportunities for customization.
For example, you probably won’t be able to alter the floor plan or choose the exact plot of land where your home will sit.
Potential for Generic Design
Spec homes can sometimes lack the unique character and charm of custom-built homes. Builders often opt for designs that appeal to a wide range of potential buyers, which can sometimes result in a less personalized and more generic aesthetic.
Less Control Over Finishes and Materials
With a spec home, you’ll typically have limited input on the selection of finishes, appliances, and materials. The builder makes these decisions based on market trends and budget considerations, which might not always align with your personal preferences.
How much do spec homes cost? Can you negotiate?
The price of a spec home depends on a variety of factors, including location, size, and features. Spec homes in desirable neighborhoods with high-end finishes tend to be more expensive, of course. Market conditions and overall demand also play a role in the asking price.
Generally, you can expect to pay somewhere in the neighborhood of $100 to $155 per square foot for a spec home, according to estimates from Homeguide. Keep in mind that this is a rough estimate, and the actual price can vary quite a bit based on location and those other factors.
When it comes to negotiating the price, builders are often less flexible with spec homes than they might be with other properties. However, it’s always worth a shot, especially if the home has been sitting on the market for a while. Builders are usually motivated to move inventory, so you might be able to snag a better deal than you think.
One of the potential advantages of buying a spec home is the cost savings compared to building a custom home. Since you’re skipping the design phase and the construction process is streamlined, you might end up paying less overall, especially in certain markets.
Is a spec home a good investment?
If you’re thinking of buying a spec home, you’ll want to consider whether it’s a good investment for you.
Affordability and value
Spec homes tend to be a nice mix of affordability and appealing amenities. They’re often equipped with modern features and finishes that today’s home buyers want.
Risk mitigation
When you buy a spec home, you’re buying a completed structure. That means you avoid the risk of cost overruns or unexpected delays that can plague custom builds.
Long-term appreciation potential
Like any real estate purchase, the investment potential of a spec home will vary depending on the home’s location, the current market trends, and the quality of the construction.
Before you buy, be sure to do your homework on the neighborhood and the builder’s reputation.
What to look for when buying a spec home
Buying a spec home can be an exciting prospect, but it’s important to go in with your eyes open. Here’s what to keep in mind:
Due diligence and research
Start by researching builders in your area. Read online reviews, ask for references, and if possible, visit some of the builder’s previous projects to get a sense of their quality and style.
It’s always a good idea to view the house in person, preferably with a Realtor. A good real estate agent can offer insights and guidance throughout the process.
Home inspection and warranties
Don’t skip the home inspection! This is a crucial step in the buying process, as it can help you identify potential issues before you commit. Consider it money well spent.
Negotiate a warranty with the builder. A warranty provides protection against defects and covers certain repairs, giving you peace of mind.
Evaluating the builder
Take some time to assess the builder’s reputation, experience, and financial stability. A reputable builder is more likely to deliver a high-quality home and stand behind their work.
The closing process
Make sure you understand all the closing costs and procedures involved. Working with a qualified real estate attorney or title company can help ensure a smooth and transparent closing.
Custom vs. Spec Homes: A Deeper Dive
So, how do custom homes and spec homes stack up against each other? Here’s a closer look:
Custom Homes: The Personalized Dream
Custom homes are built exactly to the buyer’s specifications. These are houses where you get to call all the shots, from the design and materials to the layout of every room.
Pros: You have complete control. If you can dream it, you can (probably) build it.
Cons: Be prepared for a higher price tag, a longer construction timeline (think 45 days just for lot closing and another six months for design work), and a much greater time commitment from you.
Spec Homes: The Ready-Made Solution
Spec homes are built by a builder to showcase their skills and appeal to a wide range of buyers.
Pros: They’re completed much faster, often move-in ready, and can be less expensive than a custom build.
Cons: You’ll have fewer opportunities to customize, less control over the design, and the features may be more generic than you’d prefer.
Walnut Cove Realty’s Luxury Spec Home Program: A Hybrid Approach
Some real estate companies offer programs that blend the best of both worlds. Walnut Cove Realty, for example, offers a luxury spec home program that provides a quicker delivery timeframe (6-12 months) while still allowing for a more personalized experience. It’s a great option if you want a degree of customization without the full commitment of a custom build.
Closing Thoughts
Spec homes and custom homes offer very different paths to homeownership. If you choose a spec home, you can move in quickly and conveniently. If you opt for a custom build, you’ll have more control over the design process and the chance to personalize every detail.
As you decide which path is right for you, think about your needs, your budget, and your personal preferences. Don’t hesitate to do your homework and talk with experienced real estate agents and builders who can help you make an informed decision.