Ask Andrew: Buying A Spec Home

Ask Andrew as featured on Bethesda Now

By: Andrew Goodman

Ask Andrew: Buying A Spec HomeQ: I’m looking at purchasing a home in a new construction community. What are the benefits of purchasing a spec home versus a home that has yet to be built?

A: When buying new construction, you could have a choice to purchase a spec home or a home built to your liking. A spec home is a home that the developer, with influence from its sales team, built on speculation.

They are speculating about what a buyer would want in a home and what will showcase the best if used as a model home. Here is what to consider when choosing between the two options:

Time: How much time do you have before you need to move?

If you’re looking to purchase a home in the next 30-60 days, then a spec home is your best option. A home that is to be built normally takes five to six months to complete, depending on where the developer is in the permit process and the weather.

Typically the builder will have to apply for permits, which takes roughly six weeks and then there will be a three- to four-month period to build the home, weather permitting. Every developer is different in regards to how fast they can build a home, but these estimates are are a good starting point.

Finishes: Are colors and styles important to you? Even though spec homes are built on what is most popular, those selections may not fit your fancy.

When buying pre-construction, you can choose the color and style combinations that work for you and your taste. You can also upgrade and customize the home the way you want. If you don’t need a finished basement, then don’t pay for that option when designing your home. A developer typically won’t change a spec home after they have built it, so if you don’t want the finished basement, you would have to buy a home to-be-built.

Lot Location: When buying pre-construction, you can choose where your home sits within the community. Depending on the availability of plots remaining in the community, you can decide between several plots to determine which is best for you.

When purchasing a spec home, the home is where it is. You obviously won’t be able to move that home. Please be aware that some plots have premiums attached.

So, if you’re buying in a condo building, the higher the floor you’re on, the more expensive it becomes due to views and other factors. Same thing goes for buying in a single-family community. Some lots back to trees, some are near a major road and other site factors come into play that influence price.

Price: The best deal within a new construction community is typically with a spec home.

The builder usually gives you a better deal on a home that is already built versus one that you plan to build. The reason is that the builder wants to get the spec home off of their books.

Every day a home sits vacant, it costs the developer money. Money for taxes, insurance, utilities and more. This is referred to as carrying costs. When purchasing pre-construction, you can typically negotiate a little bit off of the full price of the home, but it usually comes down to eliminating options you have selected to get to the price you want.

The bottom line is that when you build a home, you are doing so to get what you want. Options, floor plans, upgrades, lots, location, and other details are up you so you can design the home of your dreams.

When buying a spec home, you’re purchasing what has already been chosen and built. But you should be able to get a better deal on the spec home versus one that you choose to build.

Some developers will adjust a spec home to fit your needs and wants. However, it’s unlikely and has to make sense for the builder.

Keep in mind that not all developers are the same. This information is based on my experience dealing with some of the area’s larger developers.