Best Tips for Sellers & Buyers

Spec Homes or Custom: Which New Home is Right for You?

New Construction Homes by Natasha Lingle

Major Differences between Spec and Custom Built Homes

Driving through the neighborhoods of Vienna VA, McLean VA, Great Falls VA and Falls Church VA, one would notice a big change from last several years – a large number of new construction homes of various designs becoming more and more common. If you are thinking about buying new construction home and wondering about the major differences between custom and spec homes, I hope you’ll find information in this post helpful.

By now, with the help of your real estate agent, you have located the area, and, now, it’s time to decide whether to choose between speculative (spec) or custom home.

New home buyers’ choices would fall on a spectrum with spec homes at one pole and full-custom homes at the other. With spec homes, the builder’s work is done and the buyer chooses from among homes that already exist and available for sale. The spec builder who sells a move-in ready home makes all of the choices from the floor plan to the color scheme. Consequently, spec homes are often built with the features, amenities, and neutral color scheme that appeal to the widest range of home buyers.

Moving toward the opposite pole, spec home builders may offer some customization options and upgrades to give the buyer the opportunity to personalize their homes. In fact, most new homes fall somewhere within the customization spectrum, with some choices made by the builder and others by the buyer. In most cases, the foot print of the house will not be changed, but, depending on the stage of the construction or sales contract, some walls can be opened up or closed in, the floors style and color can be selected and all decorative elements including tiles and wall colors can be selected by the home buyers.

For full custom homes, the buyer makes all of the choices: lot, architect, builder, floor plan, and all the details from foundation to rooftop—according to budget and design requirements.

Also Read:

Guide to Building A Custom Home: Pricing, Timing And More…

Building Time

Build time is a major difference between spec and custom homes. Full-custom homes can take a very long time to be designed and built (sometimes as long as 2 years). Spec homes are built from standard plans that the builder has built numerous times and the full house can take somewhere between 6 and 8 months to complete.

Floor Plan—Custom, Some Custom, Spec?

Choice of floor plan falls along a spectrum from completed spec home with no choice to custom homes with every choice. In between are spec builders who offer a choice of floor plans and custom builders who use plan books as a starting point.

The Specifications

For every new home, whether spec, or custom, specifications — from quality of cabinets, to flooring and carpets, to the type of wiring and plumbing—must be developed. The specifications are the detailed instructions that the builder and subcontractors use for bidding out work, ordering materials, establishing pricing, and constructing the home.

Obviously, developing specifications for full-custom homes can take much longer than for a spec home. The buyer must sign off on the specifications and pricing before the builder can start construction. If the pricing on the final specifications exceeds the buyer’s budget, compromises on upgrades, quality of materials, customizations, and even square footage may be needed. Changes to the specifications after the contract signing, require additional paperwork.

Options & Upgrades

It is a common practice, even with spec builders, to give buyers an opportunity to make choices such as floors and wall finishes, counter tops, appliances, and similar details. The purchase often includes a free design consultation to help the buyer make choices. Although the consultation may be free, the design center staff usually works on commission and may try to upsell features.

Even a “free” upgrade package may require a substantial deposit or prepayment. Everything has a cost and, since options and upgrades involve individual tastes and special orders, the builder doesn’t want to be left with materials and choices that can’t be undone if the transactions doesn’t close or the buyer has a change of mind. In addition to an earnest money deposit, the buyer may be required to pay up front even for included upgrades.

Also Read:

How to Vet A Parcel and Buy A Perfect Lot in Northern Virginia: 8 Land Purchasing Questions to Ask

Keep an Eye on Upgrade Costs

It’s easy to get carried away with upgrades. If you are budget conscious, you should know that too many upgrades can raise the price of a new home above appraised value compared to sales prices of comparable homes.

Unique custom homes can present an even more challenging appraisal situation if there are no comparable properties. The builder isn’t responsible for the home’s value and a lender won’t approve a loan for more than appraised value. The choice is to forgo upgrades that will increase the price beyond appraised value or to bring more money to closing.

Of course, personal taste, enjoyment, and pride of ownership rank high as criteria for choosing upgrades, but not every upgrade translates to future resale value or impacts appraised value. For example, an appraiser will note granite countertops, but usually won’t adjust for the quality grade—1 to 4—of the stone.

Your realtor will provide information on sales and resales of comparable properties that will help you manage upgrade costs and make value-adding upgrades choices.

Bottom Line

There are significant differences between spec and custom homes. If you are interested in learning more, let’s get started! Please schedule your consultation HERE.

AUTHOR: Natasha Lingle is a full time real estate agent serving Vienna VA and Northern Virginia communities. She is an Accredited Buyer Representative (ABR) and Certified New–Home Construction Buyer Representative. If you are planning to buy a finished new construction home or would like to build fully custom home, you can rely on her knowledge. As your new home buyer agent, she will guide you through the steps and processes of purchase, construction, and customization. In addition, she will:

• explain characteristics of new homes and highlight the differences between custom and spec constructions;

• evaluate pros and cons of purchasing a new home versus an existing home;

• help you understand new-home construction sales contract;

• and explain such nuances as “builder’s warranty”.



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Natasha Lingle is an energetic and personable real estate professional with a proven track record of success representing home buyers, sellers and investors throughout Northern Virginia. Natasha is known for her deep knowledge of the local market, tenacity, strong negotiating skills, honesty and integrity. Whether providing expert guidance to buyers or creating custom marketing plans for the sellers, Natasha delivers the highest level of customer service to all her clients.

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