In the realm of home construction, more and more contractors are building spec homes as compared to custom homes. A spec home is a home that is built according to predetermined specifications, set by the contractor, with the idea that the home will be sold once the house is built.
In years past, a homebuyer would go to a contractor and plan the layout and design of the home before construction would begin. With spec homes, the house is planned, designed, and built before a prospective buyer has been found. Spec home building has the benefit of speedy construction but offers the risk, once the home is built, of not finding a buyer, even though the money has been spent in construction of the home. Even though spec home building is a risky investment, it offers a tremendous return on investment, making it worth the risk to many contractors.