Looking for a new construction home? A spec house might just be the one for you. Buying a home can be one of the biggest decisions you’ll make, so we’re explaining all there is to know about a spec home to help your search. So, whether you’re buying your very first home in Atlanta, GA or looking for a new build in Salt Lake City, UT, this article has you covered.
Key takeaways
- A spec house is a great move-in-ready option for those looking for a modern new construction home.
- While spec homes have modern features, you typically don’t get to pick finishes like with a custom build.
- When buying a spec house, strategize your timing or negotiate on perks instead of price to get the best deal.
What is a spec house?
A spec house, short for speculative house, is a new home constructed by home builders and made to appeal to a variety of home buyers. Since there’s no particular home buyer in mind, these homes are built “on speculation” meaning that they’ll typically feature more trendy aspects people may want in a home such as an open layout, a kitchen island, and walk-in closets.
Should I buy a spec house?
While we can’t make that decision for you, consider your house wants, needs, and budgets when weighing the pros and cons. Redfin Real Estate breaks it down for you in two lists.
Benefits of a spec home
- Move-in ready: Spec homes are typically already built or close to being finished, so you’ll be able to move in right away.
- Pre-designed: Perfect for indecisive folks, the finishes, layouts, and other touches of a spec home are already picked out for you.
- Modern design: Spec homes have modern layouts with trendy features like open floor plans, en-suite bathrooms, and walk-in closets.
- Lower maintenance and repairs: With you being the first to live in the house, you won’t have to deal with or worry about any hidden wear-and-tear, maintenance, and repair issues for a while.
- Relatively affordable: While it depends on the local market and each situation, spec homes typically cost less than fully custom homes.
Drawbacks of a spec home
- Limited or no customization: You typically won’t have a say in the cabinets, flooring, and other finishes, limiting personal style.
- Fixed floorplan: You also typically won’t have a say in the floorplan which could not fit your personal lifestyle and preferences.
- Inability to choose location: You won’t be able to choose the specific lot or neighborhood since the spec house has already been (or is close to being) built.
- Paying for unused features: Since a spec home is built for a wide variety of homebuyers, you may end up paying for features you may not necessarily want or need.
- Less room for negotiation: While you can negotiate, there is typically limited negotiation when buying a spec house, especially if demand is high.
How do I buy a spec house?
The process of purchasing a spec home is relatively the same as buying any home:
- See how much you can afford using a home affordability calculator.
- If you’re planning to buy with a mortgage, decide which type is best for you and get pre-approved.
- Find a real estate agent and begin working with them to find the right home.
- Tour various spec homes to narrow down your decision.
- Discuss your offer with your agent, consider contingencies, and make an offer. While you can negotiate with spec homes, the builders typically have already set a price floor.
- Even though the house is brand new, it’s still a good idea to get a home inspection.
- Close on the home and begin moving in.
How is a spec home different from a model or custom home?
Spec homes are built without a specific buyer in mind and are perfect for those looking for a new construction home.
A model home is made to display the best upgrades, features, and layout options a new development has to offer, which are best for those looking for a well-upgraded home. These homes are only available for purchase after the builder finishes selling the other homes in the community.
A custom home is also a new build that is completely customizable, unlike spec and model homes. These are ideal for buyers who are looking for a personalized space and do not need to move in quickly.
Spec house FAQs
If you have a question about spec houses, chances are, someone else is asking too. Take a look at the commonly asked questions about these types of homes.
Is there a right time to buy a spec house?
There’s no right or wrong time to buy a spec house, but consider buying at the end of the builder’s fiscal quarter, during a slower market season, or when construction is near completion for a better deal.
How much does a spec house cost?
The cost of a spec home varies greatly depending on location and market conditions, but a typical mid-range price brackets from $400,000 to $700,000.
Can you negotiate on a spec house?
Yes, you can negotiate on price, but builders usually have a price floor set. You’ll likely have better luck negotiating other perks like closing cost assistance, home warranties, or upgrades and features if the home isn’t finished.