Want to build a new construction home but thought it was out of your reach? I used to think that too! There are multiple ways to build a new home that range from simple but beautiful production homes that require less time and money, to extra fancy custom homes that require a larger financial investment and take longer. The good news is that there is more than one way to build a new construction home that meets your needs!
The thought of building a new home can be both exciting and scary. While doing research for our new construction dream home, my husband and I found that most new construction home building falls into 4 main categories. Each category presents different options for investments of time and money to suit the needs of every new construction home customer. I included two charts (that you can download for free).
This post is about the 4 ways to build a new construction home, their similarities and differences so that you can start planning to build your dream home! You can also watch our YouTube Video
Top 4 Ways to Build a New Construction Home
1. Production Home
A Production home is a popular choice for first-time homebuyers/homebuilders who want to buy a new construction home without making a large financial or time investment. Production home builders are typically large regional and national companies that build new homes in planned communities. A Production home is also a type of semi-custom home because the buyer can make some customizations like choosing the exterior appearance, floor plan, and interior design finishes. A hallmark of a Production home community is that the homes tend to look similar because the exterior and interior customization choices are limited.
It is typical for one or a few production builders will build all of the homes in one community; this is also true for many semi-custom home builders. However, semi-custom homes offer more flexibility for customizing the home.
A Production home is a good choice for people who may not live in their new home for a long time. Many people do not want to put a lot of time, money, and effort into building a home that is not their forever home. Production homes are an economical new construction home option because the builder owns the lot, so the buyer doesn’t have to pay construction costs during construction. Also, because there are limited customizations, the final price is more predictable.
Price predictability also makes production homes attractive to real estate investors. Although production homes don’t offer many design options, the homes take less time to build. In addition, Model homes for production homes look much closer to what the finished product will look like. Semi-custom and custom Model homes are decked out with so many upgrades, it is harder for the buyer to envision what the finished house will look like without all the upgrades.
2. Semi-Custom Home
A Semi-Custom home gives the buyer more say in the details of building their new construction home. Semi-Custom home builders typically offer a wide array of floor plans and allow the buyer more options to change the plan and other parts of the home. Buyers can also choose the exterior look and style (elevation). Semi-Custom homes also offer buyers latitude to make structural changes like raising ceiling and door heights, adding an extra bedroom, reconfiguring kitchens and bathrooms, adding specialty rooms like a theatre room, and extending the back patio. Semi-Custom builders typically offer a range of choices for interior design elements like the choice of materials for countertops, cabinet styles and colors, tile, plumbing fixtures, flooring materials, and ceiling treatments.
A Semi-Custom home is a good choice for buyers who want to put their stamp on the home, without the high level of involvement of Custom home building. These homes are a popular option among first-time and seasoned new construction home buyers because the buyer doesn’t have to start totally from scratch. Because the Semi-Custom builder also owns the lot, the buyer gets a customized home without having to purchase the land first or pay construction costs during construction.
The buyer controls the final home price, which is the total of the base price plus any lot premium and selected exterior and interior options. It is important to make a budget and stick to it as you choose upgrades to control the final home price. Semi-Custom model homes are a great preview of the floor plan. However, because they are typically decked out with a lot of upgrades, the model does not offer a good representation of what the buyer’s home will look like; most people don’t put nearly as many upgrades into one house. Some builders build Semi-Custom and Custom homes. The great news is that Semi-Custom home builders construct homes that fall within a wide range of prices, so there is something for everyone.
3. Spec Home
A Spec home is a new construction home where a Production or Semi-Custom builder is in the building process or has already been built and put on the market. The buyer doesn’t customize the home because the builder previously decided on the floor plan, and the exterior and interior design elements. However, if the buyer contracts with the builder early enough during the building process, the builder may allow the buyer to make interior design choices.
Spec homes are a good option for a buyer who wants to move into a new construction home faster by bypassing the beginning phases of the build process. Buyers who don’t want to wait until after they choose exterior and interior design elements to know the overall cost of their Semi-Custom home will find Spec homes attractive. Spec home price ranges vary, so the customer can buy a home that is as practical or luxurious as they desire.
4. Custom Home
A Custom home provides the most flexibility because you decide every aspect of the design and building of your new construction home. A Custom home is a good option for buyers that have a specific dream home in mind, know what they want, and are willing to invest money, time, and effort to remain engaged in the building process. The buyer chooses everything from the land to the floor plan design, down to the number and location of outlets and light switches. You can build whatever your heart desires and your budget will allow.
Custom home buyers set a budget and decide where they want to spend more or less money. You have unlimited choices such as additional garages, patio space, spa bathrooms, staircases, kitchen configurations, cabinet styles, appliances, paint colors, flooring, electrical . . . you name it! Custom homes are truly one-of-a-kind and have the buyer’s stamp of individuality all over them. Because each home is unique and has never been built before, Custom homes require more involvement from the buyer and tend to take longer to build. The buyer has to review and approve many details while the home is under construction. Therefore, Custom homes take a greater time investment from the buyer.
Just like Semi-Custom Model homes, Custom Model homes are decked out with upgrades as far as the eye can see. Custom home builders use their Model homes to show off their unique and cool designs and showcase what they offer. Model homes also provide design inspiration for buyers.
Building a Custom home typically means a greater financial investment because the process involves more steps that require a financial commitment. The buyer has to purchase the lot, contract with the builder, and take out a construction loan to cover construction costs. Also, the final home cost can be at a higher price point because a Custom home buyer is restrained only by their imagination and budget. Despite the increased financial commitment during the process, a Custom home is not by default a more expensive home than a Semi-Custom home. There are many communities where both Semi-Custom and Custom home builders build homes, where the home prices and appearance are comparable.
This post was about the 4 ways to build a new construction home.
Gathering information is always a step in the right direction. The best new home construction option for you depends on many factors in your personal, career, family, and financial life. The most important thing is that you keep moving forward in your homeownership goals!
Check Out our FREE New Construction Home Features Checklist! Our free checklist takes the stress out of keeping track of builder standard offerings and upgrades when you visit a model home or meet with a builder.
Best Wishes for Success!
