It involves a significant financial commitment and, well, it's where you will spend most of your time. For these reasons, people want control over their homes' looks rather than houses already built. This is why new constructions will always be popular. Builders know that people want to have a say in the final product and therefore build spec homes, aka "move-in ready homes." We will introduce you to spec homes and help you decide if they are right for you.
The "spec" in spec home is short for speculative. Builders buy land to build houses, and rather than selling plots and constructing all custom homes, they will use their designs and start building before they have buyers. They are "speculative," believing that homes will be purchased when move-in ready.
Buyers purchasing a new home have two options:
1. Choose each element before its built to exact specifications
2. Choose a spec home that is built to the builder's plans
Kind of like bespoke clothing versus tailored off the rack. Some builders will provide options and features that buyers can choose, allowing them some control over the outcome. Spec homes are a balance of reliability and amenities. Builders can build a model spec home and let buyers see how the home and development will look. Buyers know what they are buying while giving them a home that has never been lived in.
While spec homes have grown in popularity, some have a damaged reputation for poor craftsmanship and cut corners. Spec homes are built fast and efficiently but don't have to be of poor quality; you can also be in a house in just a few months rather than waiting.
Affordability: Spec homes are more affordable than pre-built homes, particularly in a hot housing market. Spec homes are more affordable, not because of cutting corners but because of construction efficiency. Designs are easy to execute, which cuts down costs, and builders want to quickly recoup their investment selling with minimal profits.
Availability: New developments spring up constantly, allowing buying in early phases, the most customization, and the best locations. Builders, already on a schedule, can supply a timeline, and no matter what the personalized choices made are, will complete your construction sooner. A developer will sometimes already have a home underway, and you can bypass the costly and time-consuming requirements of working with an architect and red tape, including inspections and permits to build a home.
With spec custom building, you can complete the walkthrough and purchase the home in a day, moving in only a few weeks later. There are no other ways to replicate that speed in new home buying.
Housing can be unpredictable and the availability of different homes changes, contributing to price swings. Spec homes may be less impacted than the rest of the market because they are brand new communities with no comparable price comparisons.
Risk Reduction: Your home is one of your most significant investments. Whether or not you see it as a financial asset, it is. You will want a home that appreciates securing your future.
While older homes can appreciate, they also require maintenance and have unseen costs. Replacing appliances, fixing structures and foundations, and surprises that only come up with home inspections accompany older home buying. These issues lower your return on investment.
With a spec home, you have peace of mind that your home, appliances, and other components are designed to current standards. Specs have a better chance of appreciation and will require less initial maintenance and upkeep than an older home.
Amenities: Depending on your purchase, you will have to make some amenities and appliance decisions. With older homes, you either buy and use the appliances with it or add to the cost of purchase for new items that fit your taste. Between making these upgrades and adding amenities such as a patio or pool, the costs of older homes go beyond your move-in day.
Spec homes provide developer experience and gain from mass purchases making important decisions about appliances, styles, fixtures, and more using previous customer preferences. Spec homes will have brand new fixtures and are designed with up-to-date trends for styling, removing the requirement of renovations.
Besides the negative reputation of some builders, the cons of spec homes are more related to individual preference. Some people prefer older homes, while others want to be in a new home. These are a few things to consider when buying a spec home.
Location: Builders will research areas for new development. Finding a spec home in your desired location is not complicated, but there may be a limited choice. You can
choose general sites but may have to make concessions on options specific to that location. If you desire to be near the main street or at the end of a cul-de-sac, homes may not be available.
Carbon Copies: A big issue with spec homes is the limited control of construction design. You can choose the elements of your home's final product, but the general style will be similar to many of the homes in your neighborhood. Your home will be reliable, modern, and well built, but might look like everyone else's.
This is not an issue for those that focus on interior design, and depending on the HOA, some exterior changes can be made, but these will cost and remove the spec home's economic benefits.
Unless you manage to purchase a home before the building begins, you will have a similar home to your neighbors, which is not a problem for many, but some might not like it.
Going Going Gone: Builders want to sell their homes quickly, and if you're going to think about a purchase for a while, you may not get the home you want. Often buyers are lined up to get the best homes in a new development, so waffling and weighing options is not usually possible. If you are selling a current home and need it sold before buying the new home, you may have trouble buying until you are close to closing on your existing home's sale.
With preparation and research, a spec home can still be a good option for buyers looking for some customization and less hassle than a home built from scratch.