Custom Versus Production Builder




What is the difference between a custom builder and production builder? 

What is the difference in an inventory home, spec home, and presale?

All of these are common questions potential buyers may ask as they educate themselves in the home buying process. My goal with this blog is to help readers understand the difference so they know what they are looking at to make the decision that best fits their needs. 

The term inventory home and spec (short for speculative) home just refers to the homes that the builder plans to build and keep in inventory.

Buyers can tour these homes like a model, but it doesn’t have the model upgrades necessarily and is generally available for sale. They are built without a particular buyer in mind, but with the plans and décor that seems to be what the majority of buyers are looking for.  The biggest difference in inventory and spec I would say, the term inventory home would be used more by a production builder, (one who builds many homes of the same plan in subdivisions at the same time). The term spec home is one that may be used more by a custom builder, (who builds one or a few at a time). 

The term presale is used more for the buyer that starts from the ground up.

They start with a builder and work out which house plan they like best, which lot they like best, and go from there.  You can do a presale with either builder. The difference will come in how much you want to be a part of decision making. You can make decisions with both, but the process is different with each.

A production builder has a select number of plans with a select number of design options to choose from.

If you are one who doesn’t feel comfortable picking out your own designs and colors, this might work well for you.  However, if you are one who likes to customize your house, designs, colors, etc, you may find it easier to work with a custom builder. There are some production builders who will allow you to make upgrades and some will not. It has a lot to do with how the homes are priced, cost-effectiveness for the builder, and appraisal value for the neighborhood.  

Custom builders will build it your way, however, there are allowances.

Once the budget has been set for the home, you will get an allowance to pick out items such as flooring, lighting, etc. If you want something over your allowance, generally there is an option to pay the overage. The risk for the builder is if upgrades are put in and then the buyer backs out, who pays for it? This is why the deposit for a custom builder tends to be higher than with production builders. 

Building a new house is an exciting time and either option of production or custom builder can be a great fit.

The choice comes down to what works for you. You may get more square footage for your money in a production build home because they can build a bigger house for less money. They have the buying power behind them. However, you may get more of what you want in the choice of lot, design options, and floor plan if you go the custom route.

Talk to your realtor who can guide you in finding the right fit and builder for you.

At Coldwell Banker Advantage, we are With You All the Way!


For more information, you can visit my Website and follow me on Facebook!​

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