Three classes of home builders are very influential, and most of the residential home builders follow into these categories; namely, custom, spec, and tract. Each of these business models provide a variety of benefits as well as drawbacks. If you're a new home builder, you can pick one model from another by going through the advantages and disadvantages of the models as mentioned earlier. But it is essential that you pick only a class home builders who can create a class building for you and your family.

Tract Builders

Tract builders are generally huge established builders that are state-wide builders, if not national companies.

Generally, they are in a few neighborhoods in a city and help build dozens of homes in a community. In addition, they follow through with many floor plans and features from their in-house design center, which does not require much flexibility.

In addition, they also build homes even if they don't have a buyer at the moment, ready and on sale for new buyers to move into such vacant dwellings.

Pros:

• Tract builders are more economical and efficient in comparison to other builders.
• Higher chance of having a wholly built new home ready for sale and move in.
• These builders have access to more considerable resources, meaning they'll be around to fulfill your warranty needs.

Cons:

• Limited customization options as you'll be limited to several options and floor plans.

Speculative Builders

Speculative builders or 'spec' in short are called as such because they buy a lot and begin with building without even having a customer at their doorstep, 'speculating' that they can sell the final home for profit when it's finished.

They are similar to track builders, where they both begin with building a home without having a customer with them. Still, unlike tract builders, speculative builders do not possess huge 'tracts' of lots or land in an area committed to building.

They instead purchase a considerable number of plots at a time and begin with the building. As a result, floor plans and features of such homes can vary from home to home.

Pros

• Offer a wider variety of ways than you can find with a tract builder.
• Speculative builders rarely build the same kind of house more than once.
• If you wish to build local relationships in your community, spec builders are small owners, which is right up your alley.

Cons

• If work has already begun, you won't have a lot of customization options.

Custom

As the name might suggest, custom builders can help you build practically anything. You can have anything you wish to have in your new home since you're the one who's paying for it and are limited only by imagination, budget, neighborhood regulations, and local building.

Unlike tract and speculative builders, custom builders do not begin working on a new house until they have a customer with them, meaning they rarely have vacant, completed homes for new buyers to close the deal and move into directly.

They are also less flexible with their pricing and more expensive to work.

Pros:

• You can get any feature or style you wish to have in your home, so long as you're willing to pay for it.
• You are not confined to a selected selection of land.
• Since building a custom house takes considerable time, you and your builder will considerably get to know each other.

Cons:

• They don't begin with building till you contract, which can mean 6 to 12 months of wait time until you're ready to close.