Buying a New Home in 2025? Here’s What to Know About 6 Popular Options

Early in your new home buying journey, you’ll find there’s more than one way to get the keys to your dream home. From purchasing a pre-sale home before a single nail is hammered to moving into a completed model home, each path has its own pros, cons, and considerations.

Here are six of the most common ways homebuyers purchase new homes – and how to decide which option is right for you.

1. Pre-Sale Home

What it is: A pre-sale home means you’re buying the property before the home is even built – sometimes before construction has started. They provide a unique opportunity for homebuyers to get in on a property early on, so you can choose your lot, floor plan, and design options from the ground up.

Pros of the pre-sale home:

• Maximum customization options. You’ll work with your builder to choose your floor plan, finishes, upgrades and more

• Potentially better pricing if you’re buying early in a community – and potential for equity growth if home values rise during the build process

• Longer timelines gives you time to plan for your move and build up a larger down payment

• First dibs on which lot you’d like your home to be on within a community

Cons of the pre-sale home:

• Lengthy waiting period. If you’re one of the first buyers, construction can take somewhere between 6 to 12 months or more

• Risk of delays due to weather, supply chain issues, or labor shortages

• Harder to visualize the final product and make customization decisions through brochures and swatches

Best for: Buyers with flexible timelines who aren’t in a hurry to move in and want a personalized home.

2. Spec or Inventory Home

What it is: Builders sometimes start homes and community developments without buyers lined up, choosing popular floor plans, colors, and finishes. These are called “spec” or “inventory” homes and are usually near completion or move-in ready.

They’re regaining popularity in the nation: National quick move-ins (QMIs) totaled 39,225 in July, up 18.5% compared to last year.

Pros of the spec home:

• Faster move-in, as the homes are much further along in construction. Sometimes closing can be done within a matter of weeks

• Less pressure to make decisions, as most design choices are already made

• No guessing games on the finished product

• Often competitively priced to sell quickly

Cons of the spec home

• Limited customization options as most of the home is already established

• Finishes may not match your personal taste

Best for: Buyers who want a brand-new home on a tight deadline and who don’t want the burden of customizations.

3. Model Home

What it is: are the beautifully decorated showroom homes used to market a new community development. When builders are finishing a phase or moving on to a new development, they often sell the model.

Pros of the model home:

• Move-in ready if you need to move in quickly

• Professionally styled with high-end upgrades and designer finishes included

• Landscaping and appliances often come with the home

• Potential discounts, as builders need to offload the property

Cons of the model home:

• Higher price point with the upgrades compared to a baseline model

• Some wear and tear as the home has been toured by many people

• Limited availability – there’s usually just one or two per community

• It doesn’t include customizations of your own

• Warranties may be expiring

Best for: Buyers who love the home “as is” and want luxury finishes without the wait. If you see a showroom you love, ask your builder immediately if it’s up for grabs, as they aren’t readily available.

4. Build-on-Your-Lot

What it is: If you own a piece of land and have a vision for designing a new home, then you’re a great candidate for building on your own lot. You’ll hire a builder and work together to construct your dream home.

Pros of building on your own lot:

• Location, location, location. You’ll build a home on your chosen slice of land

• You’re in the driver’s seat, designing your dream home with your assembled team

• More flexibility in home design and layout

• Great option if you already own land – or if you have a specific place in mind

Cons of building on your own lot:

• You need to prepare the lot. Get ready for lots of paperwork around permits, utilities, land surveying, site work, and contracts

• May require more project management on your part

• Can take longer and cost more than building in a planned community

• Securing financing may be trickier than buying a conventional home

Best for: Buyers with land who want to stay in a specific area and customize extensively to bring their dream home to life.

5. Custom Home

What it is: A custom home is a one-of-a-kind property designed from scratch with an architect and builder who are constructing the home of your dreams. They’re personalized in a way that isn’t possible in the options above – your team will focus on how you intend to use the home and build it so flows with your lifestyle and precise needs.

Pros of a custom home:

• Every detail throughout the home is tailored to your family’s lifestyle

• Maximum design freedom and customizations so you call the shots

• High resale appeal if thoughtfully planned

Cons of a custom home:

• Most expensive option with architects, builders, and contractors on board

• Longest timeline from design to completion

• Requires significant involvement and decision-making as the home is tailor-made

• Harder to secure financing and often goes overbudget

Best for: Buyers with a larger budget and a strong vision for their dream home.

6. Semi-Custom Home

What it is: A middle ground between an inventory home and a custom one. You start with a builder’s floor plan but have the option to make structural changes and choose finishes.

Pros:

• More customization than a standard new build

• Faster and less expensive than a full custom home

• Good balance of personalization and builder expertise

Cons:

• Customization is limited compared to a true custom build

• Some changes and upgrades may add significant costs

Best for: Buyers who want a personalized home without the complexity, cost and length of of going fully custom.

Bottom line: How you buy your new home can make a big difference in price, timeline, and customization options. Consider your preferences and needs as you select which type of new-build is right for you.

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