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What is a Spec House? Pros and Cons of Building a Spec Home

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If you want to move into a brand new house quickly and don’t have the time to spend coming up with your own design and building a custom home, buying a spec home is a great idea.

what is a spec house

What is a spec home?

A spec home is a home that is built on speculation that the developer will sell before it’s finished. The builders usually start to build the house with the intent of selling it by the time they finish building it (hence the term “spec”). 


Pros and Cons of Choosing a Spec Home



A spec home is a great option if you want to live in a new house quickly, but it’s important to understand the pros and cons before committing to a purchase.


Faster Possession

The main pro is that they can be finished and ready within weeks, and sometimes even less time than that. These houses are near completion, requiring few, if any, decisions. This provides great relief for people who want a quick move-in date to their homes quickly in hot real estate markets. Another advantage is you can sell your house fast and offer a quick possession knowing your new home’s possession date is also flexible. Most of this is done in a few months.


Shorter timeline

The building of any new house from scratch is long. The biggest draw of purchasing a spec home is that you can get into a new house without having to go through all the phases of the construction process like you would when building a custom house.


Less decision-making

When you build a custom home, especially if it’s your dream home, you are involved at every stage of the building process with the same builder. This means that you get to decide things like the floor plan, architectural style, and energy efficiency of the house. And those are just a few decisions before breaking ground. There are a million decisions.


Fewer delays

Another pro is that you avoid construction delays, and you can stay in your current home until the house you’re buying is ready for you. If the whole home buying process is overwhelming to you, but you want a custom home buying a spec home is a great option.


The land is already chosen

Lastly, you don’t have to go searching for land. If you want a dream house that you build from scratch in a hot real estate market, you may spend upwards of a year or more searching for the right lot. If you want something bigger (like an acre or more), then it becomes even harder.


See it before buying

One of the nicest things about purchasing this type of home is you can walk through and see it. When you are building from scratch, it’s all conceptual. Sure, you can do auto-cad walkthroughs, but nothing is quite likely walking through the actual house and envisioning how you will live your life in it.



Purchasing a spec home is usually less money than a custom home because they are often made with a plan in mind, and there is less time used up in the decision-making process. The builder likely has a floor plan they use for these houses and is able to keep costs lower than if they were to build a completely custom house. Of course, if you are moving into a red-hot housing market, the price of houses will be higher. However, most spec homes have a lower price tag than custom homes.

spec house



On the other hand, there are some cons to purchasing a spec home as well.



Some speculation home builders have been known to use less cheap materials on their homes when building on spec. While this is not the case for most builders, it’s something to be aware of. The builder is guessing that someone will buy this house before it is ready and may be prone to cutting corners or using cheaper materials (such as millwork and insulation) so that they aren’t out of the cost. It’s not always the case, but something to know when purchasing a home like this.


Lack of choices

There is no changing the floor plans. If you want to change anything in the layout, it can’t be done. This house is already long past the layout phase, so if there is anything you don’t like, you are stuck with it. Have an idea for a different type of kitchen sink, it may not work or be too costly to put in. 


No lot selection

For you, this could be a pro or a con. With this type of home, the house is already built on the lot, and there is nothing you can do about it. In other words, if you have visions of a certain type of lot in a certain neighborhood, you may not get it unless you are lucky.


Can you customize a spec home?

Yes, but the choices are limited to the last phase of construction. The drawback of a spec home is that you don’t get exactly what you want as you would with a custom. For instance, you can pick the final touches such as paint colors, appliances, flooring, and a few other features and finishing touches. But in reality, the majority of the large decisions are made for you. So if you are thinking living room vs great room this isn’t the way to go. 


How to find spec builders in your area

Finding spec builders in your area can be a challenge. However, there are some different ways you can search for these builders. You can try one of the following methods:

  • Ask your friends and family if they know of any spec builders in your area
  • Google “spec home builder” and see what comes up
  • Go through new developments and see if there are for sale signs on new houses (the lack of landscaping is a good indicator of ready homes with no owner)
  • You can also use other spec builders to find homes in other areas

spec home

Is it a good idea to buy a spec home?

Buying a spec home is a great idea when you are short on time. It’s a good option for people who want a brand new home but don’t want to go through the lengthy process of deciding on floorplans, energy efficiency, and other things that come along from building a custom home.


What’s the difference between custom homes and spec homes?

The biggest difference is that a custom home takes a lot longer than buying a spec home.

Another difference between a custom home and a spec home is that most of the decisions are already made for you in a spec home. The builder makes all the choices in the house and gets it near ready to move in conditions. As the buyer, you just select a few things like paint colors, flooring, and finishing touches.

Custom homes are also more expensive due to their unique nature and unlimited choices.


Are spec homes good for first-time homebuyers?

If you’re a first-time home buyer, speculation homes are especially beneficial. The houses are great if you don’t want to wait through the whole construction process but want a new home. 

When it comes down to it, spec homes can be good for first-time buyers because they allow them to customize their spec homes however they would like. Builders can provide a quick turnaround on finishing spec houses, so first-time buyers don’t have to wait long before moving in. Lastly, spec homes are often more affordable than custom builds.


Things to consider when choosing a spec builder

When you are picking out a spec builder, make sure to consider these aspects to find spec homes that will work for you:

Location of a spec home: be sure to pick spec builders who are near your area.

The reputation of spec builders: do some research online or ask around where they’ve built before to see if they’re good spec builders.

Spec homes offered in your areas of choice: make sure they have spec homes that are built in areas surrounding your area so you will be able to visit them without too much of a hassle.

Look and feel: each builder will have a unique building style, such as countertops, kitchen cabinets, and trim work, so it’s important to find one that has a style that matches your own.

Customization options offered: the more variety spec builders offer, the more likely it is for their spec homes to fit your exact needs.

It’s also worth noting that some spec builders may try to make their homes more appealing by offering more customization options. When buying any new house, make sure you do your due diligence and hire the appropriate real estate team to help you through the process.

Be honest with what you need and go with what fits your needs best.


Spec Homes FAQ


Do I need a real estate agent to buy a spec home?

Most real estate agents that show spec homes specialize in new construction. Their job is to find a buyer that matches the custom-built homes that the builder is buying.


Is it a good idea to buy a spec home?

Yes, it can be a great idea if you are short on time and don’t want to search through all the other homes that are on the market.


What does building on spec mean?

It means building new homes on speculation, assuming someone will buy it before it’s ready to move in.


How does buying a spec house work?

Buying a spec house works by finding a home builder that is near completion of the home and deciding on finishing factors. Once this is done, they will complete the build to your liking.


Are spec homes cheaper?

Yes, they are generally cheaper when compared to building a custom house.


What is the difference between a tract home and a spec home?

Tract homes are when builders buy large tracts of land and build several homes on them. Spec builders are when they buy one lot and begin building a house before there is a buyer.


Why do builders build spec homes?

Builders build this type of home based on the idea that it will sell before it’s ready. These are common in hot real estate markets. To see if you are in such a market, ask a local real estate agent.


What to know about spec homes

A spec house is a home that has been built on speculation, meaning the developers are hoping to sell it before it’s even finished. The builders usually start building the spec houses with the intent of selling them at the end of their construction cycle. The spec homes can be beneficial for first-time buyers because they allow them to customize their spec homes however they would like and spec builders often have quicker turnaround times when finishing spec houses.

Prospective buyers should consider these aspects when picking out a builder: location, reputation, what type of specs are offered in your area, and customization options available with each builder.

It may also be beneficial to hire a real estate agent when looking at spec homes that specialize in new construction and can help you find spec homes near your area as well as spec builders who fit your needs. Be honest with yourself about what you want and need. Don’t go with spec builders or spec homes that won’t match the style you want for your spec home.

If you have any questions about spec homes, contact a local real estate agent or spec builder. Good luck! 



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