As many people may know, there are three different types of homebuilders, Custom, Tract and Spec builders. We are often asked what type of builder do people need based on the type of house that they want. I will explain the general differences in them in the article.
A “Spec” Home Builder is typically the builder who will buy a lot or land and then build a house with the intention of selling it and “speculates” that he will make a profit from the sale of the home or the land. Spec homes are typically not large homes, rather small to medium homes with custom styles and features. The styles of these homes are from the very plain all the way to a custom luxury large home.
A “Tract” Home Builder are developers that purchase a large plot, or tract, of land and will divide that land into smaller parcels that stock plan homes are built on. These builders typically will build stock plan homes on the land. There are typically model homes to choose from and built on these lots. There is typically not much of an opportunity to make many changes in these homes. Single family homes and condominiums are built by this type of builder. Typically these homes are built with a price point and slim profit margin. Tract homes may be comparatively inexpensive and the resale value is the largest consideration when purchasing.
A “Custom” home builder is typically a small volume builder that builds all types and sizes of houses. Their services may just be contracting or full design and build home solutions. Building with a custom home builder allows for major changes and modifications in plans and can add an additional room or bathroom. Building a custom home truly gives you the ability to design, modify and create the home that truly fits your lifestyle for your family. Typically the homeowners, architect and builder can create and add variables throughout the building process that would allow for custom amenities that are tailored to the owners taste, specific home for a specific owner.