You’ve probably driven through your neighborhood, noticed a new construction going up, and then watched it hit the market just afew months later. Suddenly, there are open houses and showings, which can be confusing if you assumed all new construction homes were custom-built with a buyer already lined up. This is an example of a spec (short for speculative) house, which a builder designs to appeal to the local market and sell quickly once completed, rather than being built for a specific buyer like a custom home.

Builders choose to build spec homes for many reasons. For them, spec homes are an excellent opportunity to showcase their expertise while maintaining time and cost efficiencies. Builders research market demands and respond to current housing trends with popular designs. Builders can also display their design capabilities, craftsmanship, and overall construction quality through these properties.
Furthermore, builders benefit from cost savings by purchasing materials in bulk, as they often use standardized designs and materials. This approach helps speed up both the building and selling processes, as spec homes are created with a vast pool of buyers in mind. Ultimately, all of this contributes to faster cash flow for builders.

So, if you’re considering buying a new construction, why choose a spec house over a custom build? One significant advantage is the quick move-in timeline. Custom builds can often take over a year to complete after breaking ground, while spec homes may be finished in as little as four to seven months.

Spec homes might also be the more economical decision. Spec homes are typically priced more competitively because builders are motivated to sell quickly. In some cases, builders even offer closing cost assistance or interest rate buy-down incentives. Compared to custom builds, spec homes have much more straightforward financing, as the home is already completed, allowing buyers to avoid the
unexpected costs that come with building a home. Spec homes allow buyers to enjoy the benefits of new construction without the extended timeline or the unforeseen expenses that often accompany custom builds. Looking ahead, spec homes may also be easier to resell due to their broadly appealing features.

Features of spec homes often include modern designs, energy-efficient attributes, and high-end finishes. Spec homes also typically feature neutral color palettes and contemporary kitchen layouts. Customization opportunities are limited, which can reduce decision fatigue, stress, and the complexities that often accompany custom builds. That said, if you have a very specific design vision, a spec home may not be the right fit for you.

If you are purchasing a spec house, it’s also important to keep in mind that if you plan to renovate anything, unexpected expenses can arise—something many spec-home buyers are hoping to avoid in the first place. Another key consideration is researching the builder’s reputation. A good way to do this is by reviewing their past projects and evaluating their quality and reliability. Many builders also offer warranties for a set period of time that cover structural issues, major systems, and sometimes even cosmetic details, so it’s important to understand exactly what the warranty includes.

The most common buyers of spec homes are those who need to move efficiently. Perhaps you’re relocating for work, transitioning between homes, or purchasing a new construction for the first time. Spec homes offer the advantages of new construction along with a streamlined process that can make the experience less stressful. If any of this sounds like you, it may be worth exploring spec homes.
Unlike tract or production homes, spec homes can be built on any vacant lot, meaning you may find one in an established neighborhood you already love. Happy house hunting!

Until Next Time,
Dee Dee Guggenheim Howes

Sources:
https://snap.b ild/benefits-of-spec-home-building-for-residential-builders/
https://www.portlandrealestate.com/blog/what-is-a-spec-house/