Why Buy A Spec Home?
Many times within real estate you will hear the term spec home, but what does it really mean? A community offering new construction homes may have an available home or an available spec home, each meaning quite different things.
What Is A Custom Home?
If you have the option to customize a home by selecting each element of the home, then you are looking at a custom home. This means you make decisions such as choosing the floor plan or upgrading different parts of the home. Because it is being customized by you throughout the process, your move-in date will be prolonged.
What Is A Spec Home?
If a home has already been built and finished by the builder, then you are looking at a spec home. A spec home, or a move-in ready home, is constructed by home builders who understand the value of your time as they have already hand-picked your options. Spec homes give buyers the new home they’ve been looking for with the convenience of getting exactly what they bought. Rather than trying to envision what their new home could look like, they get to see it right then and there. Families who are interested can walk through a spec home with the confidence of knowing that house will be the one they’ll be living in.
What Are Model Homes?
As a community is developed, many builders will set up a model home. A model home is a finished spec home, often with many more upgrades to the home, to show potential buyers what they could be living in if they choose to buy a home in that community. The model home is generally one of the first homes to be completed, where it is then staged with furniture and decorations to show homebuyers something very similar that they could live in. The model home is then used for the grand opening of the community, open houses where they can have buyers walk through to get a sense of what they would be buying, and for regular showings. The model home is usually sold last after all the other homes in the community have sold, oftentimes being more expensive as it is equipped with many upgrades that were available to the homebuyers.
What Determines The Price Of A Spec Home?
A few factors will determine the price of a spec home, including the following:
- Supply of property lots. The more supply of lots the builder has, the cheaper the spec home will likely be.
- Amenities and upgrades. Spec homes typically have fewer upgrades, compared to a model home, to keep the cost of the home lower.
- Home values in nearby neighborhoods. If you are in an affluent area, expect the cost of the homes to be more expensive compared to if it was in a lower-income area.
- Design of the home. The more intricate the design, the more the home will likely cost.
- Material quality. Some builders tend to use cheaper materials while others use better and more sturdy material. The better the material, the more the spec home will cost.
- Square footage. The larger the home, the higher the cost is. Try to maximize your space for how much you actually need.
- Supply and demand. If the market has very few homes, the price will cost a lot more compared to if the market has plenty of homes.
Every element comes together to determine the cost of the spec home. Talk to your sales agent or builder to learn more information.
Can You Negotiate The Price Of A Spec House?
Negotiating on a spec home is quite difficult because the builder has likely built many of the same types of homes, which means they are likely going to have an accurate rate on which they will charge for the home. A spec home is a quick and easy way to get your hands on a new construction home, but it was pre-determined and built by the influences of the builder, so negotiating will be difficult. Of course, negotiating is always possible, especially if the spec home has been struggling to sell. Asking the question never hurts, and if you do look to negotiate, look at getting your closing costs covered by the seller or having the builder add more upgrades to the home for the same price agreed upon.
When Is The Right Time To Purchase A Spec House?
The answer to when the right time to purchase a spec house is quite simply, always, once they are available. Spec homes are set up to be finished and move-in ready by a specific point in time to offer convenience to the buyer. Instead of buying a custom home which usually takes upwards of 6-12 months, and especially longer today due to supply chain issues and material shortages, spec homes are completely move-in ready once completed, and builders typically have a few on hand as they also fill in around the custom lots of the community.
Now that we understand what an available spec home is, you may be asking yourself: What are the benefits to a spec home? Here, we’ll dive a little deeper into understanding that time is money.
The Top 5 Benefits of a Spec Home
- Spec Homes Are Affordably Priced
One of the greatest benefits of purchasing an available spec home is the savings you typically see. While many think that spec homes are seen as a “cheap” option, they overlook how efficient the home is for the price tag it has. Good home builders recognize poor design choices and invest their time in quality design plans and blueprints they know will be reliable.
- Spec Homes Are Available Immediately
Available spec homes are also known as “move-in ready” homes, which means that they are fully completed and ready to be moved into. The home is ready when you are, which is important to a lot of people that are not looking to spend 6 months to a year moving into their new home. Lengthy processes in custom home building keeps many away from new construction, but having the ability to walk through the home and move into it weeks later is crucial.
- Spec Homes Typically Have Balanced Amenities
Because home builders are constantly working with buyers to tailor to their custom homes, they understand what is popular among appliances and finish types. They are able to translate this into spec homes, ensuring it has everything it needs to support a happy future while not breaking the bank with unnecessary expenses.
- You Walk Through The Spec Home Before You Buy It
A spec home is presented to you when you visit it. Everything you see within the home will remain, as opposed to going through the building process which can end up in elements not turning out how you thought they would. You can test and touch everything that may soon be yours if you purchase the home. The sooner you decide if you enjoy what the house has to offer, the sooner you get to move in and enjoy your new home.
- Spec Homes Reduce Risk
With the housing market stuck in a shorter supply right now, as well as the supply chain greatly affecting the time it takes to build a home, people are seeing homes as an investment for their future. Investing in a spec home gives you the relief of knowing everything in your home is brand new and designed with the most popular tastes in mind. The spec home provides immediate reassurance and reliable investment. Due to COVID-19, shipping delays are much longer and material is much more expensive. Seeing the turnout of a new custom home will cost you much more and take much longer, especially in today's time. A spec home is ready with its set cost, so your bank account knows exactly what it’s getting itself into.
