What Is A Spec Home? Defined And Explained
Author:
Melissa BrockApr 24, 2024
•5-minute read
The most obvious way to become a real estate investor is to buy rental property. However, did you know that you can become a real estate investor in other ways? You can invest in real estate stock or a real estate investment trust (REIT), participate in a real estate crowdfunding opportunity, rent out part of your home or build a spec home.
If you’re looking to invest in or buy a house, you can tap into many advantages if you go with a spec home. We'll walk you through the cost of spec homes, the pros and cons of buying a spec home, the difference between a custom home and a spec home and the best time to buy one.
What Is A Spec House?
A spec house (short for speculative house) is a new house that a home builder constructs on the speculation that it will sell easily for a profit. Builders design these move-in-ready homes to be as appealing as possible to home buyers.
In other words, a spec home is built on the speculation of what home buyers are looking for. For example, builders might include ample amenities and upgrades or build a spec home in a quality neighborhood. Home builders take careful note of real estate trends and the real estate market to determine where and what to put in the spec homes when they build them.
If you find yourself looking to buy a spec home in a competitive market, a higher level of financial backing can help to strengthen your offer. Rocket MortgageⓇ offers Verified Approval , which takes a closer look at your income and assets to provide you with a firmer understanding of what you can afford and the ability to show sellers you're serious and ready to buy.