Spec Home Buying Guide for Smart Negotiations
A reader recently asked how to move forward with a spec home that a builder is marketing for sale. A spec home is a home built without a specific buyer in mind. Builders do this to attract buyers who do not want to wait through a long build cycle. If the timing and price are right, a spec home can be a smart purchase. The key is knowing where to negotiate.
What A Spec Home Is And Why Builders Do It
A spec home is short for speculation home. The builder starts construction and aims to sell before the home is finished or shortly after completion. Many buyers need to move on a firm timeline. They may be relocating, their lease is ending, or they sold a previous home. A finished or nearly finished spec lets them move quickly, which is why builders keep a few in the pipeline.
Pricing Context You Should Know
In this scenario the list price is $599,900 and the builder claims it is about $56,000 less than building the same plan from scratch. Treat this as marketing. It sets an anchor but it is not the final word. Your offer should reflect market comps, your costs to close, and the value of any extras you negotiate.
Watch For Costs Builders Shift To Buyers
Builders often load their sales contracts with fees that resale sellers typically cover in that market. Ask your real estate agent and the title company to produce a clean estimate so you know exactly what you will pay. Items to check include:
• Owner title policy
• Transfer taxes
• Recording fees and association transfer fees
• Survey and escrow fees
• Builder administrative or doc prep fees
If any of these are normally paid by the seller in your area, ask to shift them back or request a closing cost credit.
Negotiate Inclusions Not Just Price
Builders prefer to hold the sale price because it affects future appraisals and comps for the community. They are often more flexible adding value inside the deal. Ask for items that improve livability and would cost you more later. Good targets include:
• Finish the basement or at least frame, insulate, and rough in plumbing
• Landscaping, irrigation, and final grading
• Deck or patio
• Window blinds or basic treatments throughout
• Refrigerator, washer, and dryer
• Garage door opener and smart thermostat
• Closet systems and shower doors where missing
Builders buy materials and labor at different price points than retail buyers, which makes these inclusions attractive for both sides.
Use Concessions To Protect Your Cash At Closing
If the builder will not add specific items, ask for a closing cost credit. This reduces the cash you bring to closing and keeps the recorded sale price stable for the builder. Many lenders cap total credits, so have your lender quote the maximum credit your loan allows.
Inspection And Warranty Still Matter
Even new homes need inspections. Hire an experienced inspector for a new construction checklist and attend the walk through. You should also receive a builder warranty and manufacturer warranties for systems and appliances. Ask how warranty requests are submitted and how quickly they are addressed.
How To Use The List To Sale Ratio
List to sale ratio is the final sale price divided by the list price. If nearby sales are closing at 98% on average and this home is listed at $599,900, a typical closing would be around $587,900 before credits or extras. Combine this benchmark with your asks for inclusions and concessions to shape a fair offer.
A Simple Offer Plan
• Price your offer using recent comparable sales and the list to sale ratio
• Identify 3 to 5 inclusions that matter most to you
• Request a seller credit to cover any abnormal builder fees
• Keep standard contingencies for inspection and financing
• Set clear timelines for punch list completion before closing
When A Discounted Price Makes Sense
If the home already includes everything you need and there is little to add, push on price using comps and days on market. Longer market time usually increases a builder’s willingness to negotiate. Your agent can confirm whether other spec homes by the same builder have closed with credits or extras.
Talk Through Your New Construction Strategy
If you are considering a spec home and want a second opinion, I am happy to be a sounding board. I can also connect you with a vetted local real estate agent who specialize in new construction so you can negotiate with confidence.
