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What Is the Difference Between a Tract Home and a Custom Home?

Most people want to buy a home that’s tailored to their family’s needs, and the best way to do that is to be involved in the design process. You might be considering building a custom house or purchasing a tract home, but these terms can easily get mixed up. Here are the main differences so you can make the right choice for you.

What Is a Tract Home?

Tract houses include a limited selection of floor plans. You often have less say in the design and can make fewer custom requests, but prices are lower since builders buy supplies in bulk.

The construction materials used are factory-made and durable. As a result, these properties are cost-effective and have a quicker turnaround time.

Another similar residence is a spec house, which is brand-new property near completion. The builder purchases land without a buyer in mind and plans to sell later. These residences are well-built, include good amenities and are located in attractive neighborhoods.

Once you pick the model, you decide on the finishes, such as countertops, flooring and cabinets. Some builders may even give you a tour of the different models. The advantage of a spec house is the greater flexibility.

What Is a Custom House?

This type of property gives you complete control, allowing you to be involved in every decision. You can select the layout, materials, amenities and even finishes. This will enable you to make adjustments to fit your lifestyle.

For example, you can request an open layout if you like to entertain. Those who are more eco-conscious can ask for energy-efficient appliances. Creating a custom house requires buying a lot, hiring an architect and working with the contractor. The one thing to remember is that these can be more expensive to build and take longer to complete.

Key Differences Between Tract and Custom Home

Both types of houses allow you some design customization, although how much varies depending on the property type. Here are some of the main differences.

1. Cost to Build

Budget is one of the most important factors when building a home. There are many expenses to consider, such as downpayment and closing costs. Material expenses also come into play during construction. A tract house is less expensive because contractors use supplies they can buy in bulk. In addition, they have less costly finishes due to limited client requests.

On the other hand, a custom house can be more expensive. One of the main reasons is that you can include special amenities that raise the budget. Many homeowners want an open concept floor plan, but it requires knocking down walls. Another popular request is having plenty of kitchen counter space. One way designers do this is by adding an island, which can cost around $6,000 to install.

To help stay within your budget, try to find a full service construction company, which will help to streamline the work you have done. By having all the elements of your build managed by a single company, they can provide an accurate pre-construction spending plan and comprehensive site preparation.

2.  Time It Takes to Build

Another important thing to consider is the build time. If you need to move quickly due to a job change or a growing family, you want a fast turnaround. A tract house is a good option for this. It can take around seven months to build a new residence.

Tract homes are faster to build because of fewer customizations and less complex labor. Also, since all the properties in the area are constructed similarly, it cuts down on construction time.

You can go for a custom residence if you have a flexible move-in date. These take longer to build because of your requests. Plus, you’re involved in most decisions, which can slow down the process.

Figure out what you want first to make the process go faster. Look online and in magazines for inspiration. You can even tour properties in the area to see what features you want to include in your dream residence.

3. Return on Investment (ROI)

A custom home may have a better ROI because you can make smart upgrades. You want to design with your family’s needs in mind but also consider the future. Consider investments you can make to increase the property’s resale value. For example, include a steel front door, which has a 101.8% ROI.

Here are a few more upgrades to consider:

  • Adding a deck
  • Using fiber cement siding
  • Installing energy-efficient windows
  • Having a modern kitchen and bathroom
  • Creating a functional basement space

You can’t make a lot of customizations with a tract residence, which decreases the ROI. Another factor is that it has a similar layout to others in the area.

4. The Total Home Value

Both types of residences have value, and you can build a home tailored for your family. However, custom properties allow you more flexibility. They give you a chance to add features from your wish list. Plus, the adjustments you make let you stay in the house longer. For example, you can create a bedroom on the first floor if you want to age in place.

Even though there’s less flexibility, tract houses do have value. For example, they allow you to move into a desirable neighborhood at an affordable price. Plus, all the properties have similar resale values since they’re uniform.

5. The Quality of Materials

Tract homes may have lower-quality materials because the price is a top priority. Plus, contractors look for building supplies they can use across multiple residences. On the contrary, you can ask for high-end finishes when constructing a custom home. Contractors can install more complex features with a larger budget and extended timeline.

How Should You Choose?

The similarities and differences can be hard to decide which type of property is best for your family. You want to consider your lifestyle and short- and long-term needs.

Here are a few more things to consider when making your choice:

  • What is your budget?
  • Is your move-in date flexible?
  • How much say do you want in the overall design?
  • Are you planning to make upgrades in the future?
  • How long are you planning to live there?

Finding Your Dream Home

Building your dream house allows you to add amenities from your wishlist. Review these key differences and similarities between tract and custom homes before making a decision you can live with.

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