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What is a Spec House? – Bankrate.com

It’s no secret that buying a home in today’s real estate market is challenging for many house hunters. Home prices are continuing to rise in many markets, and while there are some signs of softening sales, listings still move at…….

It’s no secret that buying a home in today’s real estate market is challenging for many house hunters. Home prices are continuing to rise in many markets, and while there are some signs of softening sales, listings still move at a lightning-fast pace: The median time on the market is just 14 days, according to the National Association of Realtors.

To increase your options on the homeownership path, you might want to consider purchasing a spec house. It’s a new construction that’s been built “on speculation” — not for any particular client but in the hopes of attracting one. Not only do spec houses tend to be cheaper than other new builds, they also tend to be in turnkey condition.

Is a spec house worth your speculation? Here’s everything you need to know.

What is a spec house?

Spec house is short for speculative house. It’s a new residence constructed by a professional home builder.

“Typically, spec homes are constructed on tracts of land the builder intends to turn into a development at some point in the future,” says Kerry Sherin, a consumer advocate at Ownerly, a home valuation company. “These homes offer their future owners the convenience of buying a new property without having to wait months or even years for completion.”

To appeal to a wide range of homebuyers, builders include features that they “speculate” are things that people want in a house, such as an open layout, kitchen islands, walk-in showers, granite countertops, or anything else that is currently trending in residential real estate.

So “spec” could also stand for “specifications” — the home’s based on a set of specs that are often quite high-grade and state-of-the-art. It’s completely move-in ready by the time a potential buyer sees it.

Spec home vs model home

Don’t confuse spec homes with model homes, those sample houses in a subdivision that demonstrate the type and style of residence in the new neighborhood (something like the floor models on display at an auto dealership).

Like spec houses, model homes are constructed on large parcels of land by a builder or developer. And both function as showpieces, demonstrating what the developer can do. But model homes are essentially display houses that the developer decides to sell after the subdivision is pretty much filled up. In contrast, spec homes are built to be sold, and to attract buyers.

As a result, spec homes are ritzier. “Spec homes usually have features that are considered upgrades, and would not be included in a model home,” Sherin notes. And they are more customizable. “In some …….

Source: https://www.bankrate.com/real-estate/what-is-a-spec-house/

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