top of page

New home builders...Where do I start...


Looking to get into a new home this year? Building can be an exceptional opportunity, but quite the process. There are three types of builders...(Spec or Speculative), (Production or Tract) and Custom Builders. Your goals and finances will determine which type of builder you need. The largest market share of homes built are going to be from the Production builders--or sometimes called Tract builders. These builders will typically have a large subdivision that they are building in, with a model home to tour. They will typically employ their own sales agents that will put some of their inventory of homes into the MLS(Multiple Listing Service). This will make it difficult to really know what homes these builders currently have available. Production builders will offer a 1 or 2 year full warranty and a 10 year structural warranty. They will usually accept a contract for purchase with a low deposit--typically $1000 to $5000--at the time of the contract acceptance. They will typically cover a portion of the buyers closing costs if the buyer will choose an approved or preferred lender. Some of the builders will negotiate, but each negotiates differently. Working with an experienced Realtor is the best way to be well-informed about each of the production builders in a certain area and how each works.

Speculative or Spec builders differ from production builders usually in scale. The spec builder will buy a lot or a small group of lots and begin the build process. They usually do not have a model or sales staff. They will choose a plan and build the home, and then employ a Realtor to put it on the MLS (Multiple Listing Service) and have them handle the negotiation and sale. They will usually also offer a 1 year warranty and a 10 year structural warranty. Working with an experienced Realtor is the best way to be well-informed about each of the Speculative builders in a certain area and how each works.

Custom builders work totally differently than both of the aforementioned builders. A custom builder will not typically purchase or own lots to build on--they build on your lot. They will build to your specifications, and are only limited by your imagination and budget. Custom builders are not flexible on pricing, and are much more expensive to get started. They often require a 5-10% deposit up front, plus other possible fees, like lot fees and architect fees if your floor plan is customized.


Spec or Speculative Builder a person or company that builds houses to sell to anyone who will buy them rather than for a particular customer (1*)

Production Builder

A production home builder builds houses, townhouses, condos, and rental properties on land that is owned by the building firm. Using stock plans, or plans developed by the real estate or building company, the production home builder will construct a large number of homes each year.


Custom Builder

A custom builder constructs one-of-a-kind homes based on the client’s specifications, instead of building a home and then selling it. When working with a custom builder, clients make many of the design decisions. That what makes them different from homes in a housing development, where the developer makes those decisions.





Skip Geiser

Plum Tree Real Estate Marketing




12 views0 comments


bottom of page