One of the most important decisions you have to make when planning or buying a new home is choosing the right builder. Most builders can be classified as either Production or Custom homebuilders. What does that mean and how does one choose? In this post we will give you a run down of the differences and benefits of the two to help point you in the right direction.

The Difference Between Production Homes and Custom Homes

A Production home involves the same house design used over and over again. These are typically seen in neighborhoods that are built by large-volume homebuilders. These “tract” homes may appear in suburban locations outside more densely populated areas so larger tracts of land can be subdivided to support such construction. All homes in the community may be built by just one Production homebuilder who owns all the lots. There are a number of large, national Production homebuilders with good reputations, as well as local or regional builders that can fall within this category.

A Custom home is unique and one-of-a-kind, typically designed and built from scratch. This process involves collaboration among the homeowner, Custom builder, architect and various other parties involved in the design and logistics. Usually the home lot is a driving factor in the design and construction. Often the homeowner has found its own lot for sale, but sometimes it’s a builder lot. Custom builders tend to be associated with high quality work, and are focused on a smaller local or regional market.

Somewhere in between is the Semi-Custom home – often where a customized home is built based on an existing set of house plans that have been altered to meet the buyer’s needs, but also a term used for some Production home builders who provide greater flexibility and a large set of options to customize their stock plans for the new homebuyer.

Production Homes: The Pros and Cons

Production homes are generally built at a variety of price points, but offer enormous value and cost-savings for homebuyers. There is a no-hassle benefit to these stock floor plans. There are typically several plan choices and options from which to choose, but without having to go through the stress and day-to-day decisions of building from scratch. Time is saved throughout the Production homebuilding process, allowing a buyer to move in relatively quickly.

Sometimes Production Homes are referred to negatively as “cookie-cutter” homes. Due to the homogeneous nature of these house plans, many times there are little options when looking at finishing touches (like cabinets or flooring) or room configuration, and low flexibility once the course of a plan has been set into action.

Custom Homes: The Pros and Cons

Custom homes offer two enormous benefits – choice and flexibility. These homes offer a homeowner a choice in almost everything in the homebuilding process – from the foundation to the flooring to the doorknobs. Custom home builders are flexible in mixing styles and plans to construct a home that is molded to the owner’s needs and lifestyle. Some argue that this custom attention leads to higher quality.

Of course, all this flexibility comes with a certain price – time and cost. As either the homebuyer or the homebuilder you will be dealing with more decisions, more stress, more room for errors and possibly more setbacks than the average production home. All of the additions and unforeseen costs may not be clear at the start of a Custom home project, but can certainly contribute to the overall cost.

Evaluate your home construction options and decide the balance of quality, price, peace of mind and personalization that you want in building your home. Once you’ve determined which type of home suits your requirements and lifestyle – whether it be a Production home, Custom home or somewhere in between – make sure you’ve chosen a builder that meets your needs, is experienced and has a good track record.

Buyers all across the nation are making their dreams come true. They’re signing on the dotted line and grabbing hold of the keys to a family home.

Despite record low interest rates and enticing pricing, many potential buyers are delaying the decision to buy.

What’s keeping you on the sidelines?

Let’s take a look at the top reasons to own a home.

  • Building equity. Writing a check to the landlord is equivalent to lining their pocket with your potential equity. It is money you never get back. You’re paying for a finite amount of time — one month, one year, etc. Owning your own home means building equity. Each and every mortgage payment is going towards paying down a principal. The worth of your home, however, should continue to gain. The difference between what you owe and the value of your home is equity.
  • Predictability. Gas and grocery prices may rise, especially in the midst of this Summer’s tremendous drought in the American heartland, but a fixed rate mortgage is as predictable as they come. Your mortgage payment will be X amount for the life of the loan.
  • Tax Breaks. Uncle Sam likes homeowners! Did you know that you can deduct the interest you pay each year on your home loan? You can deduct the cost of your property taxes. Even making energy-efficient upgrades can be tax deductible.
  • Appreciation. Home prices are once again on the rise, up nearly 10 percent over 2011 prices. This means a home bought for $100,000 in 2011 could now be worth around $110,000! Over the years (real estate is a long-term investment) your home should gain value. If you decide to sell, you would be looking at a healthy profit! According to the National Association of Realtors (NAR), “The number of U.S. households is expected to rise 15 percent over the next decade, creating continued high demand for housing.”
  • Social Benefits. We’ve talked about the financial benefits of owning a home, but did you know that homeowners generally rate themselves as happier and healthier than their renting counterparts. Part of this is thanks to the stability that homeownership brings. Neighbors are more permanent fixtures in your life, meaning friendships that last for years to come. Children of homeowners are more likely to graduate high school and less likely to experience teen pregnancy. It’s all about creating a stable environment for the whole family.Homeownership can be a great way to secure future financial security and freedom. So, what’s stopping you from getting into the market? This big purchase comes with lots of perks and there’s never been a better time to buy.


May 23, 2012 – Sales of newly built, single-family homes rose 3.3 percent in April to a seasonally adjusted annual rate of 343,000 units, according to newly released data from HUD and the U.S. Census Bureau.

“The increase in April sales activity is in line with other important housing measures that have shown continued, gradual improvement from the first quarter as more consumers look to take advantage of today’s low interest rates and affordable home prices,” noted National Association of Home Builders (NAHB) Chairman Barry Rutenberg, a home builder from Gainesville, Fla. “In markets where demand is rising, we could be seeing a faster pace of recovery if not for persistently tight lending conditions that are slowing both the building and buying of new homes.”

“Today’s report is representative of the kind of modest but consistent gains that we expect to see in new-home sales through the remainder of 2012,” said NAHB Chief Economist David Crowe. “As indicated by our most recent builder surveys, more consumers are taking advantage of historically low mortgage rates amidst firming economic and job market conditions in certain areas.”

On a regional basis, new-home sales rose 7.7 percent in the Northeast, 28.2 percent in the Midwest and 27.5 percent in the West in April. The South was the only region to post a decline for the month, of 10.6 percent.

Meanwhile, the inventory of new homes for sale held virtually unchanged at just 146,000 units in April, which is a historically slim 5.1-month supply at the current sales pace.