Is new construction the right way to go when you can’t find the “perfect” home? Finding an existing home can be a frustrating experience, especially when you discover that the “perfect” home just sold. According to Zillow, homes are selling faster than in previous years. In 2020, homes spent an average of 25 days on the market before going under contract, five days quicker than in 2019.
New construction has the appeal of offering endless possibilities to create a home that truly fits the homebuyer’s needs and lifestyle. A “new construction” home is one where the buyer is the first to live in the home. However, there are different types of “new construction,” and it is important to understand the differences.
The different types of new construction homes are:
- Spec home. This is a home that is complete and ready for purchase. It is designed and built with the intention of the home selling as built. The builder “speculates” the home will sell for a profit.
- Semi-custom. This home is a step between a pre-built home and a full custom home. The homebuyer selects a pre-designed floor plan and then customizes the plan with the builder.
- Full custom. The homebuyer has a say in every aspect of a custom home. Small-volume, custom home builders typically build this type of home. A one-of-a-kind home is generally built on land owned by the homebuyer.
In this article, we examine these different types of new construction.
Spec homes are often move-in-ready, though they may be sold when near completion. This type of new construction eliminates the typical lengthy wait for the completion of a full, custom-built home. The homes are generally affordably priced and feature popular designs most families desire.
One disadvantage of a spec home is that it is usually built with no input from the buyer. However, if the home is not complete at the time of purchase, the builder may allow the buyer to make limited changes, often related to colors and finishes.
A semi-custom home begins by selecting a house plan, often a plan offered by the builder. This type of new construction is perfect for homebuyers who don’t want a pre-built home and don’t want to start entirely from scratch. After the homebuyer purchases a floor plan, the builder makes customizations based on the buyer’s input.
One disadvantage is the builder’s available floor plans may not include all of your desired features. Furthermore, radical changes to the house plans may require engineering revisions that could make the home more expensive than beginning from scratch.
Full Custom Home
Perhaps the most important advantage of a full custom home is that you have total control over the design. A custom home is what the name implies: everything is custom and matches your desires. However, a custom home is more than just a floor plan, building materials, and paint colors. The homeowner can choose even minor details, like the type of electrical switches, the style of lights, cabinet fixtures, and even the placement of internet connection points.
A disadvantage of a full custom home is that the building process takes time. Full custom homes require several months of design and pre-planning, which is only one reason a custom home is more expensive than other construction types. The total time required to build a custom home can range from several months to a couple of years.
How a Realtor Can Help
It is crucial to work with a Realtor whether you purchase a pre-built spec home or build a custom home.
Your Realtor will help you find the best home builder while being your advocate to negotiate the best deal, help with contract negotiations, and help with inspections. Should you decide not to work with a real estate agent and negotiate with a builder directly, you are letting the builder’s agent represent you, which may not be in your best interest.