Building Spec Home vs Custom home vs Modular Home


    Intro for Spec Home vs Custom Home vs Modular Homes

    We all live somewhere with large family or alone. Some people prefer to be in high rise condos in the middle of the city and some want to live in their own home with part of land.

    There are tons of options to purchase houses that were built in any city and in any area, but today we are talking about options to build new home on purchased piece of land.

    This can be done on empty lot or on land that has older home that needs to be demolished. In this article On Point Remodeling discusses three types of homes that you can build. These types will be Custom Homes, Spec Homes and Modular homes.

    Building New Custom Homes

    Custom home construction costs and timelines
    New home constructed near mountains in Seattle.

    First we would like to explain what new custom home actually means. Let’s say you have land on which you can build from scratch or demolish old existing place with idea to construct something new and awesome.

    At this point you would contact local architect or new construction builder to come up with a plan and design something that you would really like. The idea is to go nuts and make something that no other person has. There is no showroom or limit to what type of materials you can chose from. You literally can order tiles from Europe with the most unique pattern, toilets from japan and hardwood from Belarus.

    Before construction starts designer and architect work with client to get all details right. There can be up to 50 finishing details to finalize and set your approval on. Examples of these are: flooring, paint, exterior stone, stairs and many-many more.


    • Complete freedom of choices – There is no spot to custom selections for your new home when its build. Home owners or clients can get items in local stores, online sellers or even ship them from different countries.
    • Home will be unique – For those who like to be unique and have one of a kind, this option will definitely satisfy their needs. Both exterior and interior designs are made from scratch during custom home construction.
    • Return on investment – Resale value is much higher when it is new build home with custom builder and designer. After living in this place for years it will still be appreciated on real estate market.
    • Extended warranties – Paying big bucks will get you different warranties. Unlike other types of homes, all the work is done to perfection and every trade and stage of work will be warranted for more years.


    • Tons to choose from – Unless you are working with experienced designer, who will decide for you on many options there is a lot of work for clients to do. There is endless list of selections to make for home.
    • Costs are high – Premium work and materials come at high price. This type of home construction is obviously most expensive and hard to afford for everyone. The sky is the limit for amount you can pay.
    • Long time to design and build – Because everything is custom and clients can change their mind before project even starts. Every trade needs to learn the project from start and adjust schedule as it goes.
    • Finding right builder – Everyone seems to be the best builder ever, but there are tons of horror stories. Difficulty finding the right match starts during estimate and consultation stage. Ask us for suggested builders.
    • Additional expenses – When building custom homes the idea is to construct bigger, higher and something that doesn’t fall within city bylaws or regulations. Custom constructions have additional city fees, committee of adjustments and many other expenses.

    Summary for Custom Home Construction

    For home owners with deeper pockets and time availability for construction we definitely suggest exploring new custom home option.

    You can fulfill all your desires and needs for new home to have with top quality materials that you can personally select literally from any supplier in the world. New home will be original and stand out from all other homes in the area.

    Budget from $250 per square foot for new custom home and sky is the limit with luxury items and finishes for interior and exterior of new home

    Spec Homes Constructed on Your Property

    Builders and construction companies can be contacted for new spec home on the property that you own. You obviously need to have piece of land with adequate elevations for the house to be built in.

    They would already have examples of homes to choose from with options on extensions and different materials to be used for finishes. If company is large enough, they can have a show room where you can see how the house would look inside with their supplied materials.

    Once the concept has been selected and everything signed, spec home construction can start. They would not look back and change details that you agreed upon like custom home construction company would.

    The process is faster than custom home, because trades know the concept by heart and don’t need to stop for questions or inspector approvals.


    • Fixed prices – The costs are agreed upon with everyone who is interested. There is no debate or bargaining as construction companies for spec homes have set prices and they do not change.
    • Easer financing from banks and landers – Because companies are normally large and have history in construction of homes, banks are willing to work with better conditions. Tactics of spec home vs custom home, speed of construction and detailed premade contract is almost preapproved by landers.
    • No worries about mechanicals – Designs have thought out inner details of the home and you do not need to “invent the train” with bulkheads and other tricks. Structural, plumbing and HVAC runs have perfect positions.


    • Same as all other spec homes – What they build is what they get and you cannot adjust floor plans or exterior look. There are normally few options for tiles, counters and kitchens but overall it will look same as others.
    • Lower quality materials – Target market for spec home builders is for people who don’t want to spend that much money, therefore materials are purchased in bulk from lower quality suppliers.
    • Subdivision or near construction areas – Because spec homes vs custom homes are normally built in large quantities, there is a huge chance you will live next to construction site for several more years.

    Summary for Spec Homes Construction

    For those who don’t mind living in community of same new homes and have average finishes On Point Remodeling suggest spec home construction with local trusted builders.

    This is still new home typically with good sizes for interior and exterior space. Neighbors should be within similar income bracket as most of the homes are the same. You can without a problem get mortgage for spec home and completely new place for fraction of custom home.

    Spec home vs custom home is more popular in suburbs and should cost from $100 to $200 per square foot and it largely depends on area and Development Company.

    Buying and Installing Modular Homes

    Modular home construction costs and timelines
    Set up of rear wall for modular home.

    With technology expending exponentially we are now able to build entire homes or large parts of home in warehouses and bring on site for installation and setup.

    Just like in our discussion about spec home, modular construction starts with selection of choices. Some companies stick to several layouts and options for the finishes, while others specify their limits on height and size, but the rest can be complete custom design.

    If your choice falls on modular home to be constructed on your lot, you can save even more time than you would in spec home vs custom home construction. It saves not only overall project time, but also time of actual work on site, which can be crucial in some circumstances.


    • Prebuild already – The time spent on site for construction is decreased to absolute minimum. Your home or parts of house are made elsewhere and transported to site just for set up and installation.
    • Costs are less – Home owners will be saving a lot of money by getting modular home instead of any other option for home construction on their lot. For those on tight budget but still with a dream new home this option is ideal.
    • Proven concept – Companies that sell modular homes have worked on concept and layout for years with professional developers and engineers. Their suggested homes will have close to ideal layout for average person giving within range of size.


    • Transporting to far places – Transportation can be a negative factor if your lot is hard to reach or very distant from place of manufacturing. Manufacturer has to agree to transport modular home before you sign a deal.
    • Limits on sizes, selections – There won’t be unlimited options on what you can make out of modular construction. Usually company has a selection to choose from with size limits on manufacturing and transportation.
    • May not have inside finishes – The problem people who select modular homes may run into is that manufacturer provides construction without final finish details such as tiling, flooring, kitchen cabinets and many more.

    Summary for Modular Home Construction

    If you don’t mind limitations on home new home design and struggle with completion dates for this project than Modular home is worth pursuing. You can live or have renters at this property and without wasting a year for development the house can be delivered and installed in few weeks.

    It works perfectly for cottage homes and rental properties as investment. The finishes inside can be not the best, but in no time you can start making money back.

    Modular new homes are the cheapest category you can select and range from $65 to $100 per square foot.


    Market of new home construction has been growing for centuries and now almost every property owner can find suitable option for his needs and within the budget in mind. Now you can compare spec home vs custom home and vs modular home with details and costs.

    Every city has company or contractor with experience and knowledge on some type of home construction that is popular within your specific area.

    On Point Remodeling works with many home builders and manufacturers that can be suggested for your specific project. Email us with ideas for new home construction with details and approximate budget and we can refer professional team.

    Steven H.
    Steven H.
    General Contractor and Home Builder with over 20 years of experience. Write and Edit educational posts for several Remodeling Blogs. Specialize in trade management and technical construction details.

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