You are currently in the market for a new home but can’t decide between purchasing a custom home or a spec home. Let’s take a look at how these housing types differ and which home is best suited for your budget and lifestyle needs.
What Is A Custom Home?
A custom home is defined by Bankrate as a house designed personally for you by a contracted architect, this means that you have the greatest amount of flexibility compared to semi-custom homes, tract homes, and spec homes. With a custom home, you work usually with a builder, engineer and land surveyor. Working together you will select the proper lot, lighting fixtures, color scheme, size of the home, flooring type, the layout of the home, and any other wanted features.
What Is A Spec Home?
Short for speculative house, a spec house, is a new house built on the speculation that it will sell easily for a profit. Home builders have the ability to design these move-in ready homes based on market trends. Put simply, builders construct homes based on the speculation of what prospective home buyers will be looking for.
For example, a builder may include a plethora of amenities and upgrades for a home constructed in an upscale neighborhood. Home builders undoubtedly evaluate market trends to determine where and what to include in the spec homes.
Typically, spec home buyers will pay less per square foot compared to a similar customized production home or home that has been custom-built. The goal of the builder is to give the buyer a well-constructed home for a fair price.
Here are a few of the factors that determine the overall cost of spec homes:
- Home design.
- Material quality.
- Supply of property lots.
- Square footage.
- Home values in the surrounding neighborhood.
- Supply and demand.
Pros Of Buying A Custom Home
What benefits are associated with building a custom home? Let’s look at a few of them below.
Involvement In Building Process
It’s no secret that a custom home builder and a prospective owner will have a close relationship throughout this process. From start to finish, you will be in direct contact with the builder, especially if you need help finding the right lot. The design and selection process will give the buyer a sense of comfort, knowing exactly what they’ll be spending their money on.
Due to low mortgage rates, today’s housing market favors the sellers. Plus, a lack of housing availability makes competition fierce. With a custom home, you will not have to worry about competition driving up the cost of your future home.
Higher Energy Efficiency
Today’s building materials meet more energy-efficiency standards than materials made in the past. Custom home buyers can elect to install Energy Star appliances and energy-efficient HVAC systems that can reduce utility bills.
Cons Of Buying A Custom Home
Of course, there are a few downsides to choosing a custom home.
Finding A Location
This is an all-too-common issue for prospective buyers. It can be very difficult to find available land in close proximity to shopping and other amenities. Most times, you’ll have to look outside of your preferred area for available land.
Amount Of Time
It can take quite a long time to build a custom home from the ground up. It will undoubtedly take more time to complete this process than simply purchasing an existing home.
New construction projects typically cost more than resales. The added expenses are often worthwhile for custom home buyers, though. The upgrades you can receive from a custom home builder can often compensate for the expenses.
Pros Of Buying A Spec Home
There are several benefits of buying a spec home, especially in today’s housing market. Let’s take a look at a few of the pros below.
There is no doubt you will pay less for a spec home than a custom home. Builders try to control costs when it comes to construction of these spec homes. They will account for things like design, material quality and location.
With spec homes, you never have to worry about installing new features or wait for a roofing system. You will be ready to move into a quality home on day one.
No Wait Time For Construction
Even if you decide to choose a few amenities to add to the home, you likely won’t have to wait long at all for construction to be completed.
Cons Of Buying A Spec Home
Despite the numerous benefits, there are a few drawbacks to purchasing a spec home.
Spec homes often come with basic colors, flooring and other features. Most newer spec homes will look just like spec homes built in the past.
The builder chooses most of the features, so your input as a home buyer will be limited. Builders construct these homes based on what they believe potential buyers are looking for in a home.
Can’t Choose Location
Since the home has already been built, the buyer has no say in where the home will be located.
How Much Does a Custom Home Cost?
Since a custom home offers the greatest amount of customization and is only limited by the imagination and budget of the customer these homes vary wildly in price. According to Homeadvisor custom homes start at $350,000 to $1,500,000 for a total home price and between $100 and $400 per square foot. By having a budget in mind when a project starts it often makes the custom home design process easier because you know what the overall cost of the home is projected to be so you are able to decide between which options will best suit your budget and allowing you to focus more or less time and money on specific features.
Since you are now working with a total cost you can decide which areas are the most important to you and which areas are less important making a decision like a tile versus granite countertops or hardwood versus carpeted flooring.
Spec Home Vs Custom Home
A custom home is defined by Bankrate as a house designed personally for you by a contracted architect, this means that you have the greatest amount of flexibility compared to semi-custom homes, tract homes, and spec homes. With a custom home, you work usually with a builder, engineer and land surveyor.
Working together, you will select the proper lot, lighting fixtures, color scheme, size of the home, flooring type, the layout of the home, and any other wanted features.
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