What are spec homes? “Spec” is short for “speculative” — meaning a house that was constructed on speculation that someone will buy it. Spec houses are new construction from a builder that purchased or developed a lot to build on.
While spec is short for speculation, these homes are also built to certain “specifications” — each house in the development may have a similar footprint and features, like an open kitchen, quartz countertops, and wood floors. These are houses that are built to be sold, so they usually have features that are currently in demand as well as a classic design to ensure homeowners are comfortable and happy with their purchase for the long haul.
Why Buy A Spec House?
If you are considering buying a spec home, here’s what you need to know:
Cost: Spec Homes Often Competitive With Existing Homes And Less Expensive Than Custom
Your dollar may go farther toward a spec home than you initially thought! Spec homes offer an opportunity to incorporate a few cost effective details that create a custom feel without the expense of a completely customized home.
In addition, existing homes are often comparably priced, or sometimes more expensive, for the same footprint and features. The reason for this? Existing home availability has declined as younger generations enter the homebuying market with increased purchasing power. As demand increases but supply does not, prices rise!
Timeline: Spec Homes Are Move-in Ready
Unlike a custom build, spec homes offer new construction that’s turnkey — ready for your family to move right in and get settled. Spec homes are built to sell. Sometimes, you can buy one while it’s still being constructed, but typically, these homes are sold after they are complete.
Customization: Spec Homes CAN be Customized
It’s a myth that spec homes are generic. Depending on how and when you buy, you may be able to customize a few aspects of your home. It’s unlikely that you’ll be able to make major changes to the layout, however, if you purchase early you may be able to choose from a variety of finishes and fixtures. Choosing cabinetry, lighting, or countertops can easily make your spec home feel unique to your personal style.
Benefits of Buying a Spec House
If you are in the home search process, consider a spec home. Spec homes offer benefits like immediate move-in availability, new finishes and fixtures that typically have a guarantee or warranty from the builder, and a standard purchasing process — making them more accessible to the average homebuyer.
If you are looking for high-end new construction without the custom price tag, you should be thinking about spec homes.
Spec Homes vs Custom Homes
What’s the difference between a spec home and a custom home? A spec home is built without a specific buyer in mind. Builders construct these homes to be sold.
A custom home is built for someone who has engaged the builder to construct it from the ground up to their exact specifications. The timeline for a custom home is longer because the designer, builder, and homeowner all work together to decide the final result. It wouldn’t be a custom home if you purchased it after it was built!
Spec homes offer the benefits of high-end new construction to folks who may not have the time or budget to build custom. This home is the perfect example of a beautiful spec home in a neighborhood of custom builds!
How to Buy a Spec Home
The purchase process for spec homes is closer to buying an existing, older home than building a custom home. However, there are some key differences.
Negotiation: Can You Negotiate the Price of a Spec Home?
When making an offer on an existing home, the buyer has several options for negotiation and can work with a real estate agent to submit an offer with contingencies, or ask for credit to fix minor issues.
A spec home doesn’t offer that opportunity, but you may be able to work directly with the builder and lender to strike a deal, like discounting upgrades or covering closing costs. You’ll never know until you ask, and some builders and lenders are open to negotiation!
Mortgage: Are Mortgages the Same for Spec Homes?
As a home buyer, purchasing a spec home is similar to purchasing an existing home. Since you are purchasing the finished home, you’ll typically get a traditional mortgage like an FHA loan or a fixed-rate mortgage. Construction loans cover the building process — so as the buyer, you wouldn’t be expected to take out a construction loan to fund your spec home purchase.
Closing: How Long Does it Take to Close on a Spec Home?
Closing on a spec home is often faster than closing on an existing home simply because there is no one to move out, and homebuilders are motivated to sell. If you are purchasing after construction has been completed, the closing will likely include a purchase agreement, inspection, appraisal, title search, final walk-through, and signing of closing documents.
When is the Right Time to Purchase?
Like any home, the right time to purchase a spec home depends on your financial situation. But if you are ready to buy a home, you are ready to buy a spec house! However, there are some considerations that can help your buying journey:
If you want the best deal, look for spec homes when the market is slower — like around the holidays. Builders may be more motivated to move their inventory and open to negotiations or incentives.
Another good time to look into spec homes is when you’ve been scouring the housing market without luck, whether it’s due to high competition or low inventory. Check out spec homes, which are often readily available!
Starting Your Search?
Hurley Homes offers high-end, luxury-quality spec homes in St. Tammany Parish, Louisiana. Our spec homes meet the same standards as our custom builds.
We pride ourselves on long-lasting relationships with clients — we work with our clients and home buyers to become true partners to find or build you the right home, whether you are taking the first step as a new homeowner or designing your forever dream home.
