Types of New Construction Homes

When choosing a new construction home, you typically have three different types to choose from: custom, spec and tract homes. You can also purchase land and build a new construction home. As you begin your search for a home, consider the pros and cons of each type of new construction home to help you make your decision.

Spec homes

Spec homes are short for “speculative,” because builders or developers construct a single-family home, townhouse or condo before having a specific buyer. Designed to appeal to the greatest number of potential buyers, their features and finishes tend to be based on market trends and what’s popular with current buyers. You may be able to find a spec home under construction and pick some elements such as counters and cabinets. But, typically, spec homes are sold as a completed package.

What are the pros and cons of a spec home?

Pros: The work and decisions have been done for you. If you don’t have the time or inclination to make what feels like a million choices, this could be the best option. Spec homes are usually move-in ready, and you can make changes like paint colors once the home is yours.

Cons: Some spec builders go with less expensive 'builder grade' or 'contractor grade' materials in an effort to keep costs down. This may mean the home will not come with top-of-the-line appliances, flooring, counters and cabinets. If you’re a buyer whose must-haves include upgraded finishes and appliances, you may end up spending more to replace items or remodel. 

Tract homes

Homes that are developed on a large tract or parcel of land are called tract homes, and are usually built in planned communities outside the city core. With tract homes, you can either buy an available lot and pick a floor plan if the development is in-progress, or purchase an already built home in the tract. Each developer provides design choices that establish a cohesive look and feel. 

What are the pros and cons of a tract home?

Pros: Many planned communities include perks like clubhouses, pools, tennis and sports courts. They often are built near transit hubs to make commutes easier. Price can be a compelling reason to buy in planned communities, where builders rely on volume buying to lower material and labor costs. 

Cons: Homes in a tract tend to have several floor plans and features to choose from, but there’s often not a lot of room for customization. The quality of building materials and construction methods can vary widely among builders, so it’s important that you research the builder to ensure you’re getting a well-built home.

Lots/land

Buying an undeveloped lot that's not associated with a planned community gives you many options. You can build a home now, or wait until you have time and money. Or you can opt for a manufactured or modular home — factory-built options that tend to be less expensive than a home built on-site from scratch. 

What are the pros and cons of building on an undeveloped lot?

Pros: Lots give you the opportunity to build a large custom house — or a small, affordable home — on your own schedule. When you're ready, you can select a custom builder or home manufacturer and make the choices that fit your budget and lifestyle.

Cons: Undeveloped lots may not be connected to electricity, sewer, water, or natural gas, which are expensive to bring to your property line when you decide to build. Also zoning may not allow you to develop the land the way you'd like. You’ll also have to keep up the lot and pay taxes on it, even if it remains undeveloped. Research your options and county restrictions and requirements before you buy.

Custom homes

Custom homes are built for and with you. You can buy the land and hire an architect builder to help create your unique vision; or you can enter into a contract with a developer or builder to create a home on land they own. Either way, you collaborate to build a home that fits your tastes and lifestyle. If this process sounds too demanding, you can choose from an existing collection of home plans offered by a builder or developer.

Custom home builders often have basic plans you can tweak for an additional cost. That might mean adding a laundry room on the main floor or including an in-law suite in the basement. With custom homes you can make rooms bigger or smaller, upgrade cabinets and pick bathroom tiles that warms your feet and heart. The builder will give you a budget for each finish, and apply a credit if you go under and charge you more if you exceed the limit.

What are the pros and cons of building a custom home?

Pros: You have a big say in just about every part of the build. You decide on the floor plan: Do you want a formal dining room and a breakfast nook? You pick upgrades according to your taste and budget: Think high-end appliances, heated bathroom floors and french doors – whatever makes you happy and stays within your budget.

Cons: You’re responsible for all the decisions: floor plan, landscaping, flooring, finishes, paint colors, cabinets and more. Even if you work with an interior designer, you will still make the final choices. So if decision-making isn’t your strong suit, building a custom home could feel like an overwhelming chore rather than a creative opportunity.

How to find a new construction home or builder

If you're interested in newly built homes, we have more tips about how to buy a brand-new home and how to work with a contractor.

You can also search for new construction homes and builders directly on Zillow. Our listings include hundreds of companies across the country, big and small, who build custom and manufactured homes. They can also build on your existing lot. When you search on Zillow, you can use our advanced filters to find exactly what you’re looking for. 

New construction listings include information about the community where the homes are being constructed, interactive community maps and amenity details, and the status of the home — that is whether it’s finished, under construction, or can be built. The listings include virtual tours of model homes and floor plans, and connect you to information about the builder. 

You can also find builders in your area to explore possibilities. An agent with new construction expertise can help you negotiate the sale. And, if you’re unsure of your home buying budget, Zillow’s BuyAbility tool can give you a personalized estimate of what you can afford based on personal financial information you provide and current mortgage interest rates, powered by Zillow Home Loans.