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Is a Spec Home Right for Your Family?

Buying a home is a stressful, exciting, and rewarding experience all rolled in one – and that’s putting it lightly. However, more and more voices in the real estate industry suggest that the conventional route of buying a new home based on blueprints and models alone isn’t always the right choice. To delve a little deeper into this topic, let’s connect with some leading experts from around the web to see if a spec home really is the best option for you and your family.


Building a dream home is far from a simple affair. Figuring out room layouts, landscaping additions, upgrades, custom options, and a slew of other choices can lead to plenty of headaches as you wade through the development and purchasing process. But what if there was another, simpler way of finding a new home that fits your needs?


As an alternative to the standard homebuilding process, many contractors and development groups have begun to build speculative or inventory-based homes. Colloquially known as “spec homes,” these offerings seek to meet the demand of homebuyers who simply can’t wait for several months to see a brand new home rise up from an empty lot. While some might see this proposition as risky for all parties involved, the spec home market has plenty to offer for those who are both willing to explore non-conventional options and able to fit their needs to these selections.

Breaking down the “Spec Home” Concept

Before discussing the pros and cons of the spec home market, it’s definitely worth laying the groundwork for a firm definition of these homes. Otherwise, the more in-depth tangents and points of this discussion naturally lose quite a bit of their context and meaning.

According to H.M. Cauley of the Atlanta Journal-Constitution, spec homes are all about potential. Without having a buyer waiting in the wings – or showing any interest at all – many developers aim to get ahead of the real estate demand curve by building “ready to go” homes, complete with a variety of luxury features and additions. In many cases, the particular tweaks and custom improvements made to these homes – like being fully-furnished before a buyer enters the picture – are decided upon by gauging the local market’s needs and preferences.

What’s in it for Builders?

So why would a contractor want to build a home for no one in particular? As Cauley goes on to explain in his review of the subject, there’s no denying that this approach has plenty of uncertainty and risk built into the process. However, these organizations aren’t simply gambling away their money, manpower, and other resources on a whim or a guess. By offering high quality selections based upon the real estate landscape in markets across the country, spec home builders aim to take advantage of the overlap between buyer demand and the return generated by investing in these properties upfront.

Understanding the Benefits of Spec Homes

From the buyer’s perspective, there are also plenty of benefits available to you and your family by signing off on a spec home. To start, a spec home purchase eliminates many of the complex decisions that go into building a new home. Instead of fretting over whether or not a certain type of counter top works with the hardwood floors or which bathroom package best suits the master bedroom, you can simply shop around until you find a completely finished home that strikes your fancy.

It’s also important to discuss the value of timing in the spec home equation. Unlike a normal home purchase, which can take several months to a year to finish if you’re waiting on the contractor to develop your plot and build the house, spec homes are ready for a move-in as soon as you sign on the dotted line. For families that need a quick turnaround or can’t afford to wait for any other reason, this level of convenience can definitely impact the decision-making process.

Of course, there’s always the option to approach this purchase as an addition to your financial portfolio. In her look at the rise of spec homes as an investment instrument, The Wall Street Journal’s Candace Jackson notes that plenty of buyers take on spec homes as a way to turn a profit. Naturally, this perspective requires a keen sense for where you expect the market to head in the future, but it’s still worth filing away with the other benefits of the spec home system.

Honestly Evaluating the Other Side

Despite all of the excitement and potential held within spec homes, it’s also important to point out that this process isn’t right for everyone. As far as detractions or negative aspects go, the limited flexibility of this approach is a major turn-off for some buyers. At the end of the day, what you see is what you get, so any renovations or changes will generally occur after the purchase and outside of the standard expense associated with this acquisition.

Additionally, Bill Ness of 55 Places points out that if you’re part of the first wave of homeowners in a speculative development area, you could spend the next several years living in a perpetual construction zone until the builder completes the rest of the neighborhood. While this is a non-factor for some families, it can be a major deal breaker for others.

On the financial side of things, spec homes aren’t exempt from the risks associated with investments in general. Going in on a spec home isn’t as volatile as investing in a roll of lotto tickets or dumping your life savings into penny stocks, but it is still far from a risk-free proposition. If you’re considering this kind of purchase for fiscal reasons, it’s well worth your time to connect with a financial advisor and ensure that the timing and potential is right for this move into the world of real estate.

Making a Choice That Fits Your Family

At the end of the day, there is no one right answer regarding the purchase of a spec home. What your family needs and desires in a home is unique to your situation. This means that the only proper way to approach this opportunity is by weighing the benefits and the limitations in a manner that’s relevant to your housing requirements. Thankfully, with everything you’ve learned here guiding the way, there’s no reason to think that you and your family can’t make a smart and informed decision when it comes to figuring out if a spec home fits your future plans.