In search of a brand new home? A spec house could be the perfect choice for you. Making the decision to buy a home is a significant one, so we’ve compiled everything you need to know about spec homes to assist you in your search. Whether you’re a first-time homebuyer in Atlanta, GA, or looking for a new build in Salt Lake City, UT, this article has got you covered.
Key takeaways
- A spec house is a convenient move-in-ready option for those seeking a modern new construction home.
- While spec homes come with modern features, you generally won’t have the opportunity to choose finishes like you would with a custom build.
- When purchasing a spec house, timing your approach or negotiating on perks rather than price can help you secure the best deal.
What is a spec house?
A spec house, short for speculative house, is a new home built by home builders and designed to appeal to a broad range of homebuyers. These homes are constructed “on speculation” without a specific buyer in mind, often featuring popular modern amenities like open layouts, kitchen islands, and walk-in closets.
Should I buy a spec house?
While the decision ultimately rests with you, consider your housing needs, preferences, and budget when evaluating the pros and cons. Redfin Real Estate breaks it down into two lists.
Benefits of a spec home
- Move-in ready: Spec homes are typically ready for immediate occupancy or nearing completion, allowing you to move in without delay.
- Pre-designed: Ideal for those who struggle with decision-making, spec homes come with predetermined finishes, layouts, and other details.
- Modern design: Spec homes boast contemporary layouts with trendy features such as open floor plans, ensuite bathrooms, and walk-in closets.
- Lower maintenance and repairs: Being the first occupant of the house means you won’t have to worry about hidden wear and tear, maintenance, or repair issues for a considerable period.
- Relatively affordable: While pricing varies based on the local market and circumstances, spec homes generally cost less than fully customized homes.
Drawbacks of a spec home
- Limited or no customization: You typically won’t have the opportunity to choose cabinets, flooring, and other finishes, restricting personalization.
- Fixed floorplan: You also won’t have input on the floorplan, which may not align with your lifestyle and preferences.
- Inability to choose location: As the spec house has already been built or is nearing completion, you won’t have the option to select a specific lot or neighborhood.
- Paying for unused features: Since spec homes cater to a wide range of buyers, you may end up paying for features that aren’t essential to you.
- Less room for negotiation: While negotiation is possible, there is typically limited flexibility when purchasing a spec house, especially in high-demand scenarios.
How do I buy a spec house?
The process of purchasing a spec home is similar to buying any other home:
- Determine your affordability using a home affordability calculator.
- If you plan to use a mortgage, choose the best type for your situation and get pre-approved.
- Engage a real estate agent and collaborate with them to find the right home.
- Tour various spec homes to narrow down your choices.
- Discuss your offer with your agent, consider contingencies, and make an offer. While negotiation is possible with spec homes, builders usually have a set price floor.
- Even though the home is brand new, it’s advisable to get a home inspection.
- Complete the home purchase and start moving in.
How is a spec home different from a model or custom home?
Spec homes are constructed without a specific buyer in mind, catering to those seeking a new construction home.
A model home showcases the best upgrades, features, and layout options within a new development, ideal for buyers looking for a well-appointed home. These homes are only available for purchase after the builder sells the other homes in the community.
A custom home, on the other hand, offers complete customization, unlike spec and model homes. These are perfect for buyers seeking a personalized space and aren’t in a rush to move in.
Spec house FAQs
If you have questions about spec houses, chances are others are wondering too. Check out some commonly asked questions about these types of homes.
Is there a right time to buy a spec house?
There isn’t a definitive right or wrong time to purchase a spec house, but consider buying at the end of the builder’s fiscal quarter, during a slower market season, or when construction is nearing completion for a potentially better deal.
How much does a spec house cost?
The cost of a spec home varies significantly based on location and market conditions, with typical mid-range prices ranging from $400,000 to $700,000.
Can you negotiate on a spec house?
Yes, you can negotiate on price, although builders generally have a set price floor. You may have better luck negotiating other perks such as closing cost assistance, home warranties, or upgrades and features if the home is not yet finished.