Whether it’s a home in Austin, Texas or a new development in Charlotte, North Carolina, if you’re shopping for new construction, one of the first options you’ll face is to decide between a spec home and a custom build. Both fall under new construction, but offer a very different experience. Spec Home offers speed and convenience with most decisions made for you, but with custom builds you have full control over your design, layout and finish. The right options depend on how involved you want to be in your timeline, budget, and process.
In this guide we’ll break down what each path looks like, their pros and cons, and how you can determine which one best suits your lifestyle.
What is Spec Home?
Spec Home (speculator short) is a new construction home built by a builder without a line of buyers. Builders will choose lots, floor plans, finishes and features in advance, hoping to sell the home once it is finished. Spec houses are also known as “Move in Lady” homes, as they are often finished or nearly finished.
Why buyers choose spec home:
Fastest Move-In: Unlike custom builds that take months or a year, Spec Homes are usually ready to occupy them immediately after closure. Decline in Decisions: Builders have already selected design details, so they don’t need to manage their upgrades or floor plan options. Benefits of New Construction: You are still getting a modern home with brand new systems, appliances and materials.
How to purchase Spec Home:
Tour the completed (or nearly finished) properties. Make an offer so that you are at a resale home. Perform the usual steps such as loans, inspections, evaluations and closures.
The biggest advantage of buying a spec home is that you can get a brand new home with long waits and no intensive design process.
What is a custom build?
Custom builds are a type of new construction homes designed and built specifically for buyers. Instead of purchasing move-in-enabled properties, you can work with your builder to choose the lot, floor plan, finish and layout. This gives you complete control over what your home looks like.
Why buyers choose custom builds:
Personalize: From kitchen design to bedroom count, all details can be tailored to your lifestyle. High-end finish: Specifications Choose from premium materials and upgrades that may not be available in Home. Future Planning: Custom homes are often designed with long-term needs in mind, such as growing family and space for aging.
How the process works:
Meet with your builders to plan your design and floor plans. Get secure funding (often permanent loans from construction) and get the necessary permits. Construction will begin, but depending on the complexity it may take several months to a year or more. Once completed, move through standard closure steps, IE inspections, assessments, and final documents.
The biggest advantage of custom builds is that it is truly your home and designed your path. But it requires more time, more decisions, and often higher budgets.
Important differences between spec home and custom builds
Both spec homes and custom builds fall into new construction, but they vary in how much control you have, how long you wait, and how much you spend.
Factor Spec Home Custom Build Customization Limited Options. The builder selects most details. If you purchase early, some finishes may be selected. Get complete control over layout, finishing and functionality tailored to your lifestyle. The timeline is faster muin as the house is already built or nearly complete. A longer process with design, permits and construction can take more than a year. More predictable pricing costs. In many cases, advances are low and may include builder incentives. Higher and variable costs depending on the design choice, upgrades and materials. An engagement handoff process with minimal decisions. High involvement in ongoing meetings, approvals, and choices. Perfect for buyers looking for convenience, speed and set budgets. Buyers who want a unique home and are happy with the time and cost.
Bottom line: Spec homes are best if you want a new home quickly and at a more manageable price, but if you value full personalization and don’t mind a longer, more practical process, custom builds are the right one.
Spec Home Pros and Cons
Strong Points
Fastest Move: Often, you can move quickly as it’s completed or nearly finished. Simplified Process: Builders choose most finishes, making less design decisions. Cost Benefits: Builders may offer lower pricing due to large amounts of material savings. Easier Funding: Make the mortgage process easier, just like buying a resale home.
Cons
Limited Personalization: There are few opportunities to choose between layouts and finishes. Style compromise: Built for a wide range of charm that may not match your taste. Higher Price Possibility: Includes upgrades that increase overall costs. Future renovation needs: You may need to update features that don’t suit your lifestyle.
Pros and cons of custom builds
Strong Points
Full customization: control of layout, design and finish. High Quality Options: Ability to choose durable premium materials and features. Energy Efficiency: Embedded with modern and sustainable building techniques. Personalized Style: Create a home that reflects your vision and lifestyle.
Cons
Higher advance costs: Unique design and increased costs for professional labor costs. Longer build times: It often takes more than a year to complete. More involvement is required: Frequent decisions and project management can be stressful. Resale risk: Over-customerization can reduce appeal to future buyers.
Do I need to buy a spec home or a custom build?
Please select the spec home.
If you choose a custom build, you need a home designed around your lifestyle, waiting for a longer construction timeline and having budgetary flexibility to handle the higher costs of customization.
Spec Home and Custom Build FAQ
1. Can a “custom” house be cheaper than a builder’s model home?
Sometimes, not often. Custom homes are usually more expensive, but simple designs with basic finishes are cheaper than models loaded with upgrades.
2. Does a spec house hold its value?
yes. Their value, like any other home, depends on the location, quality and market conditions.
3. How long does it take to build a custom home?
Most take 9-12 months, but large projects can take time.
4. Do you need a real estate agent to buy new construction?
yes. Agents will assist you in contracting, negotiating and testing.
5. Can I fund a Spec Home just like a resale home?
yes. Spec Home uses traditional mortgages. However, custom builds often require a construction loan that will later be converted into a standard mortgage.
