If you’ve shopped or researched purchasing newly built homes, you have most likely come across the term “spec home”, but what does that mean? Simply put, a “spec home” is one that a builder or investor has initiated (and maybe even completed) without a specific buyer lined up, but they are anticipating a buyer will arrive and the reward of a sale will result. In some regions, you’ll also hear these referred to as “market homes” meaning they are being built to be on or go on the market as opposed to being a “pre-sale” which describes a build that already has a buyer (usually before the project started).
As to whether you should purchase a spec home, that comes down to the traditional protocols of qualifying any home and concluding if it meets your needs and wants. Research the home just like you would any other, and even though the home is new, it’s recommended to still have the home inspected prior to purchasing (check with the builder on their system for such).
Depending on the size and style of home, a the home build can require 3-4 months for smaller homes, 5-9 months for medium size homes with more extensive finishes, and 10-24 months for more intricate builds with specialty finishes. If the home is being built “on spec”, then it’s possible you will discover the home at any point during the planning or building of it. Why is this point important? Because the status of the home when you discover it may determine if you are able to make any changes or selections from that point forward. One thing to keep in mind as you walk the home is that just because something’s not yet been done or installed doesn’t mean you’ll get to select it. Many home components are ordered VERY early in the process (like cabinets), so always check with the builder’s team to confirm what you can or cannot select if the home is still in production.
There can be advantages to purchasing a spec home. One of which is that – as long as your market has enough inventory – is that you’ll often be able to view a variety of new homes and select the one you prefer before committing to a single one. Another aspect that can be an advantage if you’re not a fan of details and decisions is that the builder has made all the decisions for you, so if you are the type who would dread the process… well, a spec home is a great option for you to own a brand new home without having to go through the building process. On the flip side, if you’re one who enjoys the details or are very particular on components and want a brand new home, a spec home may leave you always wishing something was different. In those cases, a fully custom build may be the route for you.