Custom Home vs. Spec Home: Which one is Best for you?

Purchasing a home or constructing one is perhaps one of the biggest financial commitments that an individual can make in their lifetime. Among the myriad choices available, two popular options stand out: on the one hand, custom homes, and the other, spec homes. Both formats have their benefits as well as drawbacks and being aware of them can assist you make the right decision depending on your needs, budget, and goals in the future.

Custom Homes

A custom home is a home built to the specific order of a buyer with their specific features, design, style, and layout in mind. This process allows homeowners to engage the services of renowned architects and builders to achieve the kind of homes they desire. Custom homes are developed from scratch, starting with a selection of the lot and the distribution of the space to the selection of materials and  finishes.

Key Features of Custom Homes

Personalization: Custom homes provide the homeowner with total control of the choice of the structural and interior features that make up the home such as the architectural design, location of doors and windows, and even type and color of the siding. Consumers can install some features containing add-on components and their specialties like custom cabinets, distinctive rooms, stylistic design, and even energy control systems compatible with their lifestyle. Because you’re starting from scratch, you can even control the position the home faces to optimize the flow of natural light throughout the day.

Quality Construction: Since builders of custom homes typically only work on custom homes, you can usually expect a certain level of quality and skill that comes with this sort of specialization. Custom builders usually also have different types of architects, engineers, designers and stagers that they work with to ensure that they are building a home in alignment with the client’s vision. That kind of focus can yield a longer-lasting and more attractive home, and not to mention resale value. A home built by a prestigious builder will most often sell for a premium due to the builder’s excellent reputation. 

Future-Proofing: Ideally, buyers can build their own home looking for extra space for a growing family or other considerations such as accessibility for use in later years. A very popular trend lately is to build for “multi-generational living”. Many families these days are looking for a home with a main level bedroom suite, or an office/den that can double as a bedroom for their aging family members. 

Location Flexibility: There is usually flexibility in lot selection, hence homeowners can select their preferred lot in the neighborhoods of their choice and in proximity to the preferred amenities. Though land can be scarce, depending on where you are looking.

Challenges of Custom Homes

Higher Costs: Many of these houses are relatively expensive because they are built according to the client’s specifications and from high-quality materials. This can be a major factor if you have a limited budget and limited funds. Furthermore, the builder may need to hire specialists to install certain features that you may desire. 

Longer Timeline: Custom home construction is a relatively complicated process and may take years depending on the level of detail involved. This involves time to secure permits, pass inspections, as well as for the construction process. A lot of the time dedicated towards the build involves the selecting and finalizing of the layout, design, and finishes. When selecting finishes, keep in mind that some of your materials may be coming from overseas, which increases the shipping time. And for carefully crafted custom items, those take time to produce and ship. If you don’t mind waiting 12-18+ months for a new home, then a custom home could be a good option for you.

Decision Fatigue: Homeowners may also suffer from decision overload, given that the numerous options mean they have to make many decisions throughout the construction process. Building a custom home will take up a lot of time and energy - it may even feel like a part-time job for some individuals. There are many decisions to be made and you will be on a timeline to make those decisions. Think about hiring a designer to help out with the selection process.

Spec Homes

Spec homes or speculative homes, are homes that are built by developers without any clients in mind. These homes are built by common archetypes that are acceptable for most people. Spec homes are homes built with specific designs and features that are targeted to meet the needs of local buyers, and can typically be located in new construction communities where builders want to offer homes in ready-to-move condition for buyers.

Key features:

Affordability: Spec homes are generally less costly than custom homes because the builder is not necessarily choosing one-of-a-kind features. Instead, they are building a home that will appeal to the masses based on trends and sales data. This does not mean that the quality will suffer, rather, that they typically don’t use finishes or designs that are too unique. Through volume sourcing of materials and by adopting standard designs, these homes are likely to be affordable to younger generations, and sometimes first-time homeowners among others.

Quick Move-In: Spec homes can be completely built and even sometimes advertised just before their completion and homes are readily available for occupancy. This is good for those who have to move at very short notice, or for those who do not want to wait 12-18 months for a custom home. Many builders in the DMV region will list their homes for sale once they are completed or very close to completion.

Less Decision-Making: Since there are not numerous decisions to arrive at, the buying process of a spec home is not as complicated and time-consuming. The buyers can avoid having to make considerable decisions on the design and can instead concentrate on only a few basic decisions. Some builders for spec homes will offer the buyer a few options for certain materials, but will generally keep it to a minimum, and sometimes they may have already ordered certain materials in advance.

Challenges of Spec Homes

Limited Customization: Homes that are built by the developers are typically called spec homes and buyers have little say in its design or the planning of the layout. While the majority of the decisions are taken by the builder, the house may not fully satisfy the buyer’s requirements or preferences, resulting in compromises. 

Quality Concerns: There can be poor standards of material due to sheer volume purchasing and construction quality standards can be mediocre or excellent depending upon the trends followed by builders and the quality of the labor force. It’s important to do your research and consult with a local real estate agent before making any decisions so you’re aware of the builder’s track records.

Potential for Cookie-Cutter Designs: One disadvantage of spec homes is that they look similar and have similar characteristics. Buyers may not love the fact that the exterior of their house looks quite similar to other houses in the neighborhood. Again, there is not much variation in layout and design with spec homes. Typically once there’s a successful sale, the builder will use the same materials for the next home.

Custom Homes Pros: 

• Total User control and customization of the design.
• Better quality of the used materials and better workmanship.
• Flexibility in terms of adapting the home to changes in occupants’ needs in the future.
• Free to choose where the equipment is to be positioned.

Cons:

• Increase in the cost of construction and the duration of building construction.
• Decision-making by adults also involves choices that, when done for the long term, can prove to be tiring.
• One risk of development is difficulty in identifying the kind of land suitable for development.

Pros of Spec Home:

• Economically they cost less to construct and are ready for occupation sooner.
• The total number of decisions is reduced because the buying process is much more simplified.
• Most of them are situated in well-established new areas of the city or towns.

Cons:

• Few differentiation opportunities and the risks associated with parts quality.
• Possibility of acquiring a home that may not be special.
• Less flexibility as far as design components and arrangement are concerned.

Choosing what is best for you

When deciding between a custom home and a spec home, several factors should be considered: 

1. Budget: If one is flexible with the amount of money that they are willing to spend and has specific design requirements,  a custom home could be ideal. However, if the cost is the main constraint then a spec home may be most appropriate. A spec home is a home that is built before a homeowner is found.
2. Timeline: Consider when you want to be moved into your new home. If you are looking to move quickly, you should go for a spec home. Unlike production/spec homes, custom homes take much longer  to design and  construct. If you do not have any concerns regarding timeline, then perhaps a custom home would suit your needs.
3. Lifestyle Needs: Think about what’s most important to you in a home and then ask your realtor if there are homes that fit your needs and budget that are already ready to move-in. If your needs are more specific and you are not seeing any results on the market, then you may have to consider a custom home. Think of your future self as well. Will you need this home for different things in the future as well that you will need to individually curate? Or, do most of the spec homes being built satisfy your needs today and in the future.
4. Personal Preferences: Think about the level of your participation in the process of design. If you want to make your own decisions regarding handles and knobs and want to get your hands dirty, a custom home is going to be more satisfying. If you do not fancy the processes involved in having a personalized home, then a spec home may suit you.
5. Market Conditions: Another factor is the market of the real estate. Spec homes could be fashionable in a certain market area, whereas in custom houses; there could be room for bargaining.

Conclusion

Selecting between a custom and a spec home always comes down to the choice, needs, or wants and expectations of the buyer. Homes built according to clients’ requirements are luxurious, unique, and have a high level of quality while spec homes are less expensive, and one can occupy them immediately. Thus, by critically analyzing all the advantages and disadvantages of the given variants, you will be able to choose the optimal one that corresponds to your vision of the future home. Aside from the potential savings inherent in deciding on a spec home or the exclusivity of a custom build, knowing your requirements will lead you to the right option for you and your loved ones. For access to exclusive opportunities such as off market lots for sale, and upcoming builds, contact Nadia Khan, today.