Production Versus Custom Home Builders: What’s the Difference?
One of the first decisions to make in the new home process is rather to go with a production versus custom home builder. Do you know the difference?
As you plan your new home, one of the first questions to consider is whether working with custom home builder or a higher volume home builder (also referred to as a production builder) is the best choice for you.
Both types of builders are excellent options and each can deliver a great new home for you. Much of the decision will rest in how many choices you wish to make — as well as how much design input you’d like to have during your home’s construction process.
At its core, the difference between a production home builder and a custom home builder is simple:
A production builder simultaneously builds a community of homes based on a library of floor plans, each with a limited array of personalization options. A custom builder typically creates a one-of-a-kind home that offers an even greater range of design choices that’s often built on a single lot.
Here's a breakdown of what to expect from each:
According to the National Association of Home Builders (NAHB), most production-based home builders:
- Offer home and land as a package
- Offer a range of house plans to choose from
- Allow buyers to select their favorite style/design from a menu in several product categories
- Build homes priced for first-time, move-up and luxury buyers
As the name implies, the process of building a custom home is less scripted because there are no pre-defined choices or menus to choose from. With custom homes:
- The home can be built on land you own or land that you acquire.
- You can supply a floor plan or commission a set of floor plans to be drawn from scratch.
- You can work with a separate architect and builder — or with a design-build company that manages both the architectural design and the construction process.
- You’ll be more involved in the process and have the opportunity to make many decisions.
- You can pick from nearly any product in a category — within your budget, of course – rather than selecting from a defined menu of choices.
The Production Home Process
A production builder can usually deliver the same size home for less money than a custom builder. The reasons lie in volume purchasing power when buying building materials and land and a higher volume, often systematized approach to construction.
Buying the right type of land is a big part of a production builder’s strategy. Many larger builders construct homes in large, master-planned communities. A production builder’s scale and access to a large number of lots in such communities also allows the construction process to be fine-tuned for greater efficiency.
Higher volume builders can also pass on cost savings by purchasing building materials in bulk. Just as large airlines can lock in low fuel prices by ordering in volume, production builders can use their size to order materials for hundreds of homes at a time, often at lower prices.
An advantage of production home communities is that the community developer also works closely with each builder to insure an attractive mix of homes. In addition to mixing models or floor plans from several builders, each floor plan typically offers multiple elevations to vary the look of the front of each home. By changing the placement of windows, gables, and the size and shape of the front porch, a single floor plan can be built in several different looks.
To add further design appeal, each elevation can usually be constructed with a differing type and color of exterior. A given model home can be built with various in brick, siding, stone or stucco and varying shades of color to offer pleasing diversity and individuality.
As a buyer working with a production home builder, you’ll typically start by selecting a lot for your home and your favorite floor plan from the builder’s library of plans. The next step is to select an elevation. Many production builders also offer the opportunity to specify the use of a bonus room; based on your needs, a bonus room can be built as an extra bedroom, a study or even a media room.
Next, you and the builder will work together — often in a design center— to further personalize your new home by selecting design options, home styles, colors, finishes and other key products in your home such as appliances, cabinets, countertops and carpet and flooring.
Buyers who select a production builder typically cannot change the basic structure — i.e. the layout of rooms or square footage — but each model has a wide array of attractive options to choose from to personalize your home in many respects.
The Custom Home Process
Expect to pay more for a custom home than a production model of similar size and floor plan; after all, the typical custom builder doesn't enjoy the economies of scale and labor efficiencies that a production builder does. Of course, the actual price will depend on a number of variables — the most obvious being the size of the home, the intricacy of its design, the building products and materials you select, and the land you purchase.
While many people associate custom homes with large and expensive homes, a custom home can range from a simple ranch-style home to a more elaborate and multi-story floor plan designed around your lifestyle.
Once you select a custom builder, you can supply your own floor plan or work with an architect to design a home from scratch. As a custom-home buyer, you can select most of the details in your home and you can even work closely with your builder to design a floor plan that works around existing trees on your land and that places your windows to take advantage of the best views.
When building a custom home, your choices are nearly unlimited. The main restrictions are your budget and any building code or zoning limitations. If you find that freedom to create a home from a blank sheet of paper to be exciting, then building a custom home is likely for you.
The key to working with a custom builder is to establish a realistic budget and to stick to it, even when you’re enticed by a lovely but higher-cost option. While most buyers realize that additional customization will increase the home’s price, unexpected land-related costs can take you by surprise, so it pays to do your homework.
At one end of the scale, you may hold the deed to a flat suburban lot with in-ground utilities already available at the curb. Such a finished lot is ready to build on.
On the other hand, you may be considering wooded, rural or steep hillside property. While such land is no doubt scenic, the upfront costs of preparing previously undeveloped rural land for construction is typically a significant additional cost in addition to the purchase price of the land. Site prep — building a driveway, bringing in water, electric and sewage lines, and excavating the foundation — can be quite expensive. Your builder and architect can help you estimate those costs, too.
Even if you’re building on already developed land, you and your architect and builder need to carefully research zoning or deed restrictions. To avoid surprises, have an attorney clarify all restrictions and get estimates on site work (either via the builder or on your own) before completing a land purchase.
Because the process of building a custom home is, not surprisingly, truly customized, you’ll typically spend a lot more time designing and constructing your new home than you would if you work with a production builder.
That said, knowing what to expect at each stage — and especially what choices you’ll make and when — can make your custom home process smooth and result in the home you've always dreamed about.