So, what’s the difference between a spec home and a custom home? Many buyers don’t know the differences until they are far into the process of looking for a new home. In this article, we’ll outline the differences between the two for prospective home buyers.
This is a spec home or a standard home built from plans that were developed without a particular lot or buyer in mind. This house is designed to be the most versatile home on the lot. It can be the best choice for many different home buyers. This is to be contrasted with custom homes which are developed for individual buyers based on many criteria. The plans, lot, inside and out can be developed specifically to fit the individual needs and dreams of the buyer.
Design Flexibility and Control
Typically, all of the work on a spec home is completed prior to a buyer walking through the doors. Online, or in brochures, you can see a completed model home – exactly as it exists. By the time you purchase a spec home, the floor plan is locked in, the size of the porches are fixed, and the finishes are already decided. Some builders do offer upgraded options before the home is built, but most of the decisions have been made for you. You may be able to trade out some finishes for others within a certain budget, but overall, you are limited.
A custom home build is so desirable to so many buyers, including first time home buyers. Instead of choosing from online floor plans, the home owner gets to create the plans from scratch with the builder or start off with one of the builder’s current plans and then customize it. For example the home owner may want to start with a 3 bedroom plan but would rather have a 4th bedroom instead of a larger dining room. Or perhaps they want hardwoods in all of the bedrooms, or have special needs or wants that require some unique accessibility features. Custom homes can meet the needs of many different buyers. For example, the first floor master suite with a large walk-in shower on one side of the vanity and a huge walk-in wardrobe on the other is a very common custom feature desired by many home buyers. All possible.
The tradeoff is decision fatigue.
Creating a custom home involves making hundreds of decisions. Some home buyers relish the variety of choices ranging from faucet colors to floor covering patterns. Other buyers, however, can find the number of decisions exhausting, particularly when it comes to selecting a paint color and they know they are going to spend weeks arriving at a final choice.
I’ve noticed a lot of custom builders incorporate upgrades into their production homes on a hybrid basis. This means their standard products include all the features and functionality you need for everyday living, and then you can upgrade those standard products for an additional fee. Hybrid plans require you to make some decisions up front in order to calculate the upgrade cost, but then you have complete control over the costs associated with those upgrades.
Cost Considerations
Typically spec homes cost less per square foot to build than a custom home. While there may be some initial savings in the floor plan, the big cost savings are in overall square foot cost due to builder efficiencies such as buying in bulk, building multiple homes at the same time, and repetition on the same floor plan.
Custom homes generally cost more than production homes. In the process of building a custom home, every extra or detail (such as window styles and sizes, brick patterns, or color) must be individually considered and ordered by the sales representative from the manufacturer. Customers can see and feel samples before the siding and trim are purchased and installed. Unlike the custom home process, production homes are built from pre-tested floor plans, manufactured in a production manner and built by the same crew of workers until all of the same model homes are completed before moving on to the next model.
When comparing the cost of a spec home vs building a custom home it is important to consider the entire cost and not just the list price. If the spec home does not include everything you want you can be certain that there will be a long list of upgrades to get the home you desire. But typically you can build custom from scratch and stay on budget to get the home you really want for a total cost of the many thousands of dollars of upgrades needed in the spec home.
Financing a Spec Home versus a Custom Home Build is Different in Many Ways. Both can qualify for a traditional mortgage. There is a big difference in how each are purchased however. Typically a Spec Home goes under contract before all construction is completed whereas a Custom Home Build is being constructed from the ground up. Due to this fact, a Custom Home Build typically requires a construction loan that then converts to a permanent mortgage after the home is completed. These types of loans may have different features that require a larger down payment and/or higher interest rate during the construction phase.
Timeline Differences
You might want to start paying some respect to spec homes, because no one has time to build a house from scratch right now.
Many of our homes have already started or even completed! Homes that haven’t started yet, the builder has a very complete plan so construction can start quickly and the home can be completed in 60 to 90 days. Additionally, the builder has already established working relationships with suppliers and key subcontractors.
All our custom builds are individual in their own right but have one thing in common: they always take longer than expected. Either the design stages can take months to get correct before a brick is laid, or delays can occur during the build for products to arrive or to allow special amendments to be made. More commonly, both design and build will experience knock-ons with the build taking over 8-12 months to complete.
An experienced Huron County OH home builder can start off an affordable home construction process by assisting you in designing a custom home. This builder will also know many skilled and reputable Huron County subcontractors that will complete quality work in a timely manner. An experienced builder may take a few more months to complete a custom home than it would take to complete a spec home that was already designed, but would work very hard to complete your home as soon as possible.
Quality and Long-term Value
Quality can vary in these two categories, but in vastly different degrees. Some spec home builders may have taken some cost out of the house to lower the sale price somewhat, other builders who include a spec home or two in their production product line are committed to the same high standards that they build to in their other production homes. The challenge with building a spec home is that the builder must make quality versus price decisions in order to hit a price point that is wide enough in appeal to most demographics.
The custom builder is a rare breed. His relationship with the client is unique, and the quality of work he produces usually exceeds that of the production builder. As a result, most problems are minor and easily corrected before they escalate into a company wide crisis. But with so many things going right, there is always the likelihood that certain things could be done better. This is especially true for the custom builder seeking new ways to manage his projects more efficiently and increase his profitability without sacrificing quality.
The Custom Build option is different to our other options because the decisions about your new home are taken by the people who will actually build it. This means that the person designing your home will be the same person who builds it and can answer your questions as the plans are developed.
Making the Right Choice
Do you consider a spec home option for your new home? Yes, often spec homes are considered when a fast build, known costs, and a home that meets most of your needs can be found in a spec home plans. Many home buyers prefer to use a spec home over the stress of starting from plans that need to be designed.
GO – CUSTOM. If your requirements cannot be met with our standard homes GO – CUSTOM. Custom homes allow maximum flexibility and allow you to build exactly what you want. The GO – CUSTOM process is longer and more expensive than the standard home process but the end result will be what you want.
Both options have advantages. The decision between them ultimately rests with your preferences, schedule, and needs. Read More