What’s the difference between a custom builder, a project home builder and a speculative builder? If you are new to ‘the building game’ you may not know the difference and may not understand which type of builder is right for you. Here’s some info that might help decide which type of builder you need.
Custom Home Builders
Custom home builders build unique, one-of-a-kind designs. They are usually designed by a draftsperson or an architect specifically for the site and tailored to suit the client. Custom builders tend to be smaller volume builders due to the extra time involved in building one-off designs.
Pros
Client has input into the design.
Home can be designed to suit your needs, preference and budget.
You can choose what suits your taste and lifestyle so that your home is tailored to you.
You can choose the features that are important to you.
You won’t end up paying for features that you don’t like or need.
Cons
There is more uncertainty in building a custom home than in a project or speculative home regarding total cost, finished look, how long it will take, whether you will like the finished product etc.
It is a long process from design to approvals and through construction to completion so is less suited for a client with time constraints.
Project Home Builders
Project home companies build a limited number of home designs with limited ranges of materials and fixtures offered. They build large numbers of homes as quickly and cheaply as possible. They are able to keep their costs down by the volume of homes built, by streamlining their processes and by negotiation bulk discounts on materials. They may build on their own land which is referred to as ‘a house and land package’ or they may build on land purchased by the client.
Pros
Often offer extra incentives.
You can look at show homes, pictures and sample materials so you know exactly what you are getting.
There is less risk and uncertainty of cost. Apart from site costs, the price is clear up front.
Cons
There is a limited set of house plans. Your home will be duplicated multiple times over perhaps in your own street.
There is a limited range of fixtures. Usually a base range is included in your price. Luxury fixtures which are often seen in display homes will cost more.
There is not a lot of opportunity to make design changes. Variations to the original plan and inclusions are usually expensive.
Quality can be compromised due to the speed the homes are built in order to keep costs down.
Project Home designs tend to be best suited for flat, rectangular blocks. If you have a difficult block, the costs escalate quickly or the company may refuse to build.
Speculative Home Builders
Speculative home builders buy land, build a house on it and then sell it. They are built with a specific buyer in mind and designed, built and fitted out in a way that will appeal to a large number of buyers. ‘Spec’ homes are built to completion by the builder and are usually completed or nearly completed when sold.
Pros
Speculative homes are completed and ready for occupancy.
You can see exactly what you are buying.
You avoid researching products and making lots of choices/decisions.
The price is fixed so it is simpler to get financing.
Cons
Speculative homes are designed and fitted out by someone else. You have no choice.
They may include features you don’t need, want or like.
You will have to pay to have any customised changes made after purchase.
