When evaluating the purchase of a newer home, the two most important factors that impact the home’s quality and long-term durability are the builder and their goals. The majority of homes are built by speculative developers, who are building for profit. A minority of homes are built by “end users,” those who are building their dream home for their families. Although these homes tend to sell for approximately the same price, I strongly recommend that clients purchase custom-built homes vs “spec homes” whenever possible.

Spec homes, or homes built for speculative profit by developers, tend to have a lower level of quality than custom homes. With most spec builders only doing a few projects at a time and in different cities, they tend to focus on profit instead of building up their long-term reputation. There are certainly excellent spec builders out there, with Pacific Peninsula Group and Benchmark Builders being a couple of my favorites. Yet most builders will focus on cosmetic items while skimping on expenses for the infrastructure that lies behind the walls, thus neglecting the long-term integrity of the build.

Custom homes tend to be built by the most discerning buyers who feel that the options available on the market do not work for their goals, and are willing to spend three to five years of their lives building their dream home. The mindset of these end-user builders is very distinct from spec builders, with a focus on building the best home possible for their family. These builders are willing to spend the extra million to enhance what is visible as well as the home’s infrastructure and systems. Custom homes look better than spec homes on day one, but the differential between the two magnifies as they age. Custom homes that are ten years old often feel like they are six or seven years old, whereas a ten-year-old spec home can often feel like it is thirteen years old.

Are custom builders rewarded for sacrificing years of their life and spending more money for greater quality? Unfortunately for the sellers (and fortunately for the buyers), custom homes tend to sell for slightly higher or the same as spec homes on a per square foot basis. With many buyers and agents focused on the simplistic metric of dollars per square foot, the extra expense inherent in the construction of a custom-built home often gets diluted, and most sellers get less than a shocking 10 cents on the dollar for the extra money spent for the higher-end build quality and material. Meanwhile, the spec project will receive a premium relative to its lower-end material and construction, given the finished product is the prevailing contemporary aesthetic and design.

The lack of a real premium for high-quality homes is due to the simple fact that many buyers and unsophisticated agents cannot differentiate between high and mediocre construction quality. I admittedly only began learning to make these subtle distinctions in quality as I started building and remodeling homes myself. You ought to ask yourself if there is a large spread in a cost that will likely go unnoticed, “which one would I buy?” The answer is to purchase great quality at a substantial discount.

The best way to extrapolate a home’s quality is to evaluate its windows and doors. These are good indicators, as there can be huge differentials in the cost of these materials but usually little benefit when reselling a home. Consequently, developers generally install very cheap windows and doors, while finer ones are a clear marker of quality.

On windows, buyers may be surprised to know that custom wood windows from Europe can cost ten times as much as unbranded vinyl windows from China. For doors, solid core doors with strong hinges can be five times as much as hollow-core doors with cheap hinges. If you see owners who invested heavily in windows and doors, you can count on quality in other areas we cannot see behind the walls.

The only area where spec homes are often better is in their floorplans, since they are designed to appeal to the widest net of buyers. Conversely, some custom sellers tailor the home to their individual needs above resale foresight and occasionally design an incurable floorplan flaw. An example is providing only two suites upstairs since the owners built the home for their needs and they had only one child. If you can cure the flaw through a minor redesign, the greater quality is worth the effort.

While I have built homes for resale, I never have, nor will I, spend the small fortune and give up years of my life to build a custom home. The phrase “build a house, lose a spouse” humorously conveys the stress that comes with building your own home. Instead, save yourself this frustration and purchase a custom-built home secondhand and enjoy the quality and the home aging well.

By Ken DeLeon