Spec Home
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While there are advantages to having a home built to your exact specifications, the long wait to completion isn’t one of them. Spec homes, also called inventory, feature or move-in ready homes, solve that problem. “Spec” is short for “speculative,” meaning the builder builds the house based on market demand speculating that someone will want to buy it when it’s complete. This gives you an alternative to buying an older, pre-owned home or hiring a builder for a custom home.

The Pros and Cons of Choosing a Spec Home

Family Touring a Home
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A spec home is ideal if you prefer to buy a newly built home, but you also want to move in as soon as possible. Having a house built based on a customized plan can take six months to completion, while a fully custom-built home can take more than a year from start to finish. With a spec home, there’s no waiting. You can plan your move-in date without worrying it will get pushed back due to construction delays.  

A spec home gives you the chance to physically walk through your prospective new living space to get a feel for it before you commit to ownership. You might discover what you presumed would be the perfect kitchen size actually feels too small once you’re standing in it or realize the sunken living room you wanted isn’t really your thing after all.

Most spec homes go up for sale only when they’re fully complete except for the finishing touches. That means your customization options are largely limited to finishings such as paint and flooring. The architectural style, floor plan, features such as bay windows and fireplaces, and even the lighting and appliances are all chosen by the builder. If you’re not picky, this can be an advantage because it saves you months of research, planning, and decision making.

If you have clear ideas on what you want in your future home, however, this lack of control is the biggest downside of buying a spec home. Not only could you miss out on features you wanted, but you might end up with expensive features you don’t want, and that drive up the price of the house with no real benefit to you. What’s more, your home is unlikely to be anything particularly striking. Most builders stick with the styles and features they believe will sell easily, so your home will look much like other homes built by the same builder.

Spec homes have a reputation for being built with lower quality materials based on the presumption that builders chose whatever they can get at a contractor’s rate. In reality, the quality of the house depends on the builder. Most builders use adequate quality materials, but don’t often splash out for anything high end.

That said, because spec homes let builders use familiar house plans and buy materials at favorable rates, builders can install high-end materials in their spec homes at less than they could for a custom home, then pass those savings to the buyer. You can get luxury appliances, stone countertops, and hardwood flooring for much less than if you bought them for your own custom home.

Financing for a spec home is also simpler than for a custom home, letting you avoid progress payments and other hassles related to financing an on-going project.

What to Know Before You Start Looking

Moving Into a New Home
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If you’re considering buying a spec home, start researching your area’s spec home builders through your local home builders’ association and by browsing online and in the newspaper real estate listings for new homes.  

Check their public records and their reviews with the Better Business Bureau. Look through their websites and social media to get a feel for their work. Drive by some of their homes currently for sale to see the styles and quality in person. When you’ve found three or four builders whose work you like, set up an interview and ask for references you can call.

Look for a real estate agent who can guide you through the buying process. Their experience will save you a lot of time and trouble, and the cost is on the builder. Likewise, choose your own mortgage lender. While many builders have a preferred real estate agent and lender they can recommend, choosing your own helps ensure you get professionals with the right knowledge and skills for your individual situation.

When you’re ready to start seriously shopping around, keep in mind you probably won’t find a spec home with every feature on your dream list. While you’ll need to compromise in some areas, don’t shy away from asking about possible modifications, even if the home is already complete. Wall and floor coverings, as well as some lighting and plumbing fixtures can often be changed, and some builders will even upgrade appliances.

Builders hesitate to reduce sales prices of their homes because doing so brings down the value of the neighborhood, creating an overall loss for them, their buyers, and the existing residents. Instead, many negotiate by offering upgrades as an alternative to a lower sales price. This way you as the buyer get more value for your money without negatively affecting the neighborhood.

Even though everything in the house is new, you’ll still need a professional home inspection to be sure the building is structurally sound, and its systems and features are in working order before you buy. Choose the inspector yourself, rather than accepting the builder’s recommendation.

Get familiar with what your home’s warranty covers and for how long. Most offer one year of coverage on materials, such as doors and flooring, two to five years of coverage on systems such as plumbing and electrical, and 10 or more years of coverage for major structural defects such as a cracked foundation or collapsing roof. Others offer a 10-year warranty on everything in the house.

A spec home gives you the chance to live in a brand new house without the headache of planning it all and the long wait through the construction process. Because you’ll get to tour the house before you buy, you’re less likely to end up disappointed than if you’d chosen your home based on plans alone. While you probably won’t get every feature you dreamed of, if you’re flexible, you can find a home you’ll love quickly and on highly favorable terms.

Editorial Contributors
Henry Parker

Henry Parker

Henry Parker is a home improvement enthusiast who loves to share his passion and expertise with others. He writes on a variety of topics, such as painting, flooring, windows, and lawn care, to help homeowners make informed decisions and achieve their desired results. Henry strives to write high quality guides and reviews that are easy to understand and practical to follow. Whether you are looking for the best electric riding lawn mower, the easiest way to remove paint from flooring, or the signs of a bad tile job, Henry has you covered with his insightful and honest articles. Henry lives in Florida with his wife and two kids, and enjoys spending his free time on DIY projects around the house. You can find some of his work on Today’s Homeowner, where he is a regular contributor.

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