What is a spec home and what are the advantages of this housing type?
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.
Spec Home Cost Factors
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 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.
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.
When Is The Best Time To Buy A Spec Home?
It’s recommended to buy a spec home from a local builder, which gives you a better opportunity to negotiate price, according to RocketMortgage. Buying in dead seasons, such as the wintertime or near major holidays, is a helpful tip toward potentially saving money.
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