Types of Residential Home Builders

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If you are thinking of having your home built by a home builder, you should know that you can choose from three of the most common types.

While it is pretty standard for builders to be a mix of these, you should pay attention to their specialty so you can be assured that you are going to get your money’s worth. Check if your chosen home builder is a:

Custom Home Builder

Many homeowners prefer to sign contracts with a custom home builder because these companies are more adept in working with almost any type of home design—be it minimalist or rustic.

The only limitation a homeowner may have is their budget and perhaps local building codes and neighborhood restrictions. But, custom home builders can practically build anything that their clients wish to have.

Custom builders would not be able to offer you a finished home because they would only start building it once both of you have agreed on the design and other considerations. In terms of pricing, most custom builders would base their cost on the size and specifications that your home would have.

In general, they would request at least a 10% down payment. You have to remember that starting a custom home is much more expensive because you need to secure building plans and permits. Those who require a custom home builder are those who already have their lot.

Tract Builders

Tract builders are also commonly called production builders because their scope of work would generally produce a number of homes, sometimes hundreds of them in a neighborhood. Since they are in the business of building several homes, each house follows only one set of completed plans.

In some cases, they would have at least three or four different floor plans to choose from, but they cannot be customized as they would usually sell these homes as-is. This type of builder would not depend on the client, as they would proceed with building their homes even if they don’t have a buyer yet.

It is common for them to show you a vacant home for sale, which is readily available for you to move in. In most cases, they would set up a model house unit, so it would be easier for you to envision your life in any one of their pre-built homes.

It is also pretty common for them to work with real estate sales agents to help them sell their homes. In terms of flexibility, you cannot expect it from tract builders.

Spec Home Builders

Spec builders or speculative home builders can also be called the buy and sell builders. Like tract builders, they build homes even if they do not have any buyer yet.

They are only speculating that they can sell the spec home to prospective buyers after it is made. However, unlike tract builders, they cannot build thousands of homes since they do not have large tracts of land or the budget to do so.

Commonly, they buy a piece of land, start building and sell it afterward. The profit they earn would be used to purchase another lot and build more homes. Since the location of the lots can vary, the home design may also change.

If you are unsure about the type of home builder to choose from, it is best to write down what you want to have and compare and contrast it with homes for sale in your area. If you prefer to have a unique home, then investing in a custom home builder is well worth it.