Should you remodel your home, or build new? Learn what to consider when making this tough decision.
Spec Home vs. Custom Home

Custom Residential

Spec Home vs. Semi-Custom Home vs. Custom Home

When designing a new home, it’s important to understand the level of service you’ll need to get the particular quality of new home you’re hoping for. From a spec home, to a semi-custom home, to a fully custom home — here are the differences between the levels of service and the quality of the end result.

July 23, 2019

What is the difference between a spec home, a semi-custom home, and a custom home?

Designing a new house is a chance to create a home that is uniquely you. The spaces can be crafted beautifully around how you live, and everything can just feel perfect. That’s what a custom home does best.

To get to that point, a lot of work goes into making sure it all works. There are a ton of tasks to juggle: zoning and code research, figuring out the best location for the house on the lot, understanding the best aesthetic for both the clients and for the location, preparing an appropriate approach to addressing sustainable goals, finalizing material and product selections, coordinating drainage on the site, ensuring the structural engineering is designed, designing the site and landscape, reviewing and selecting a general contractor, assessing preliminary and final construction pricing, deciding the furniture and soft good concepts, selecting interior finishes… The list is extensive, and that’s not even everything. A great team for designing a custom home knows this, and acts as advocates for the clients throughout the process, guiding the work, and making sure it all happens as smoothly as possible.

I love this sort of project type. While remodels make up the majority of residential projects in Seattle (because the city is already built out), new homes are one of our passions. Our integrated team of architects, interior designers, and landscape architects ensures we approach projects holistically to come up with a great solution. As you would imagine, it is a lot of work and takes careful attention to detail to get it all right.

This is why fees for custom homes can easily hover between 8% and 15% of construction cost. The wide range accounts for variation in site conditions and the level of detailed service. Also, our fees for the design of a new home typically include interior design and landscape architecture fees, which at many architecture firms, would be handled by separate, additional design firms the clients would need to find and hire.

Yet, frequently when talking with potential clients excited about a new house, we’ll hear something like this: “We talked to another architect that a good friend recommended and they quoted us $15,000 for a permitted plan set that would be all we need to build our dream house.”

If they’re spending a million bucks on construction (which, sadly, is what a rather lovely, but not too fancy, home costs at a minimum in Seattle right now), then that first architect’s fee ends up being 1.5% of construction cost. Let’s say our fee is 10% of that million-dollar construction budget, or $100,000. It is easy to jump to the question of, “How the hell are you guys worth $85,000 more?
”

Facepalm.

The challenge here is that we’re comparing apples to, um, horses. (Not even oranges.) It really comes down to what level of design and service is best for what you want. So let’s walk through the levels of service you might seek when you decide to build a new home.

Here are typical levels of service for designing a new home.

The Spec Home

This is the $15,000 (give or take) plan set from that first architect we talked about above. The client gives the architect a direction, a program (4 bedrooms, a big kitchen, 3.5 bathrooms, etc.), and the site. And then, the architect just sits down with the code and bangs something out. This involves maybe one design meeting and there isn’t much (or any) chance for optimization of the plans. It includes a basic permit set, though engineering fees are often in addition to the architectural fee, and then boom, you have a buildable plan set.

Now, we’ve done this work before, and we still do it from time to time for developers. The project ends up far better than if a contractor just sketched something, for sure. But whenever I hear people complain about ugly houses or architecture, the example they’re looking at either falls in this spec home category, or it was something designed without any input from an architect. Seattle needs housing, and so going down this road is still an affordable way of getting housing that looks ok. It isn’t custom, and there will be no landscape or interior design at all. This can get you decently-designed square footage, but invariably, the execution and detailing will be poor.

The Semi-Custom Home

This particular approach runs the gamut from a slightly-more-customized spec home to something that almost lives in the realm of a fully custom home. In this scenario, far more client interaction occurs, and some (but not all) of the design work and details are considered in advance of construction.

In instances like this, we’ll sometimes provide design “mood boards” to define the interior design concept, but then let the clients source all the finishes themselves, now that they have the direction. Similarly, a concept site plan may be designed and drawn, but the exact details of what that built-in bench looks like, or what that large tree is, are not finalized. Additionally, some of the details for how the interior stairs and railings meet the walls, or what the window and door trim looks like, or how the cabinets are detailed and built are all somewhat left to chance.

This still provides an opportunity to get a home that is far better designed than a spec home, with the knowledge that there will still be plenty of surprises during construction, as figuring out everything simply wasn’t in the scope of work. Fees can range wildly depending on the particular scope, and this is best figured out in advance at each phase of the project with your design team.

The Custom Home

This is a home that is tailored specifically to the site, to your tastes, and detailed so that the interior and exterior all look the way you hoped, integrated and whole. This is the service level that is required for complicated sites, or for clients who really know what they want and want to ensure that they get it. Everything — from ensuring that the refrigerator door opens fully, to the plant selections, to the efficient and quiet mechanical system sized for the house — has been researched, selected, and installed. Questions during construction are addressed and the house ends up being what you pictured. This is a lot of work, and an investment in design fees, but it pays off.


So what path to designing a new home is right for you?

I always like to tell clients that to make this choice, you first have to know yourselves. You have to be honest about your goals, your budget, and your tolerance of design and details that are not perfected. Take this self-reflection and talk with your design team about what the best approach may be for you. Sometimes, it may mean going with a smaller home but one that is fully custom. Other times, it means a spec house that you know you’ll live in for a few years, sell, and then use the proceeds to build a semi-custom home that is more appropriate as your forever home. Either way, know that your design team should be your resource and your advocate.


Wondering about that home at the top of this post? Read more about it and see what it looks like on the other side…

Would you like to read more from the team?

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