What’s The Difference Between Custom, Tract and Production Homes?

June 14, 2019 9:00 am What's The Difference Between Custom, Tract and Production Homes Published by

Building a home is certainly not a matter to be taken lightly. There’s a lot of money tied up in this project, not to mention your expectations and desires. Before you even think about having a home built, you need to understand these three simple terms: Custom home, speculative home, and tract home. Why do you need to know these terms? Because most of your home-building options will fall into one of these three categories. 

Custom Homes:

A custom home is exactly what it sounds like: A home that is custom-built to the customer’s exact specifications. The first and most obvious advantage is the ability to make a home that is tailor-made to your lifestyle. For instance, if you have a lot of pets, you might want to build your home in a more pet-friendly way (no carpet, pet doors, etc.). Or, if you are a pool enthusiast, you might want to have a billiard room included in the floor plan. There is an endless list of possibilities here. 

Most of the time, custom homes allow the customer to visit the work site and inspect the work as it is being done. Although you want to step back and let the professionals do their work, it is equally important to make sure that you get your money’s worth. With a good custom builder, you should be able to do that. 

The biggest disadvantage of the custom method is the expense. This is usually the most expensive way to have your home built, which is the price you pay for a tailor-made home. Also, it might not be worth the money to build an expensive custom home in a bad neighborhood, or on an overly small plot of land. When you have a custom house built, you want to make sure that you can live there happily for many years to come. 

Speculative Homes:

Speculative homes are kind of like custom-made homes, except for one big difference: Someone else made them. When architects and home builders create speculative homes, they are creating a unique product, and they are usually trying to tailor each home to a certain market. Spec homes can be a great way to go because they are generally cheaper than the custom option. A quick look at this website should give you a rough idea about the kind of price range that you can expect for a spec home. 

At the same time, you may end up making some compromises when you buy a spec home. By purchasing a home that is made to someone else’s idea of perfection, you will be missing a chance to create your idea of the perfect home. Still, spec homes tend to vary greatly according to the preferences of the designer. Thus, you have a pretty good chance of finding a home with which you can be happy.

Speculative homes are extremely common, as this category includes any home that is neither based on a stock design nor completely customized. In 2004, 80% of all new homes manufactured in the UK were spec homes. 

Tract Homes:

Tract homes are made in large numbers. If you’ve ever driven through a neighborhood where all the houses look (more or less) the same, then you know what tract homes are. These are definitely your cheapest option, as the mass-produced nature of these homes makes it far cheaper to acquire the materials and labor to do the job.

When people imagine their dream home, they generally don’t think of a tract home. However, uniqueness isn’t that important to some people, and cost might force some other people to go with this option regardless of their preference. Some others might choose to build or purchase a tract home so that they can rent it to others. 

If you are looking to set yourself up as a landlord, a tract home would be an ideal choice. You will save money on the construction, and you won’t need to spend a lot of money on extras like fine cabinets or decorative fixtures. Maintenance is also likely to be easier for anyone working in a tract home neighborhood. Since every floor plan is the same (with only slight variations) a maintenance/repair worker will always know what to expect. 

However, there is a legal problem in some states when it comes to tract housing. Consider this case, in which a judge ruled that a “tract housing exception” existed in a case where a man was suing a company over faulty construction. So, if you get a badly-built home, your ability to take legal action might be limited. 

Selecting The Right Builder

It is very important to select a builder that specializes in the type of construction that you have chosen. Most builders can be classified as custom builders or production builders. To put it more simply, custom builders focus on quality while production builders focus on quantity. 

This does not mean that a production builder cannot produce quality homes. On the contrary, these builders make their reputations and their living by providing acceptable quality at an acceptable price. Either way, make sure you ask to see a portfolio of your builder’s previous work so that you can see where their specialties and experience are. 


You may not be an expert on these matters, but you don’t want anyone else to know that! Learning a little bit of basic terminology can do a lot to help smooth relations between you and those that you hire to build your home. By learning to speak in their language (even just a little), you can also help to ensure that your instructions are followed correctly. 

As with many other matters, you have to make a decision of cost vs. quality. If your particular preferences are not that unique, you might be able to find a good middle ground by going with a speculative home. Either way, we hope that you will learn these terms well and that you will fill out the contact form so that we can bring you more great content like this.