Many builders are choosing spec home building over custom home building. Spec homes, short for speculative, are new construction homes that are partially or fully built before a buyer is identified and a purchase contract is in place. Spec homes are often referred to as move-in ready or homes under construction. The market conditions have dictated a need for spec homes with demand in the housing market growing but inventory remaining low. Spec homes are popular for people in a hurry to move, buyers who are tired of the resale market inventory and competition, and those who want a new construction home but not the burden of having to choose every customization. Spec home building offers many advantages to both the buyer and the builder.
Cost For both builders and buyers, spec homes have cost advantages. Builder spec home financing is also often a quicker process with many builders choosing private lenders for real estate over large banks. Builders can price the home accordingly and adjust pricing if their initial estimates change such as labor and materials costs, utilities, necessary equipment, etc. Builders can choose upgraded finishes to help increase the value of the home but because of bulk purchasing, those cost savings can be passed onto the spec home buyers. This can amount to significant cost savings for spec home buyers.
Control Spec home builders have more control over the entire project from budget and schedule to location and customizations. Spec home builders can choose the sub-contractors who work on the project, select the exact materials they want to use and have more control to keep the project on track. Which leads us to the next point...
Timeline Because of this control, spec home builders can operate more efficiently. Spec home builders aren’t waiting for the buyer to choose their countertops or color and style of cabinets. They also don’t have the buyer interfering with the project, such as changing their minds on customizations or being indecisive, causing delays. In addition, spec home buyers are also able to know when the home will be ready and they will be able to move in since the home will be finished or nearly completed. This can be especially attractive to buyers when deciding between custom home building and purchasing a spec home.
If you are a builder in need of builder spec home financing, contact Snap.Build today to find out how we can help you seamlessly get approved so you can start building quickly.