What Is an Inventory Home?

A new home isn’t just a matter of picking a standard model. There are custom builds, modular builds, production homes and more—including inventory homes.

But what is an inventory home, and when should you consider buying one? Here’s what you need to know.

Inventory homes: What are they?

The meaning of “inventory home” is in the name, and they’re usually used as a sample home for builders to show potential buyers. Inventory homes are newly built and have never been lived in.

Builders usually design inventory homes with layouts and features they think will appeal to the most buyers. Some are on the market fully built, right down to the smallest style decision, such as countertops and appliances. Others are for sale partially built. In those cases, you may be able to weigh in on the details.

Inventory home pros and cons

Inventory homes are right for some buyers, but not all. Consider the pros and cons of inventory homes if you’re considering buying one.

Pros

No customization hassles: Inventory homes are builder-designed, so you don’t have to make every choice along the way. The builder has already made major and often minor design decisions. You just have to pick the home.

Move in sooner: You can move into an inventory home sooner than a custom-built home, often right after closing.

New construction for less: Inventory homes also tend to be less expensive than custom homes. Buyers don’t need to shoulder the many extra costs of building a house, such as buying a plot of land or securing permits. Builders are motivated to sell these properties, which can save you 10% to 20%, depending on how long the house has been on the market.

Cons

Materials may be lower-grade: Builders create spec homes as samples, so they don’t always use the highest quality materials. Many use builder’s or contractor’s grade—the lowest quality tier, one step below “quality grade” and two steps below “custom grade.” Builder’s grade materials are less durable and valuable than other materials. You may wish to ask a builder what grade they use.

Fewer options for customization: The builder, not the buyer, designs the inventory home. Those homes tend not to have the little extras that a custom-build buyer would choose simply because the builder isn’t going to live there. You’re unlikely to see specialized countertops or custom cabinetry in an inventory home, and you may not have the chance to install them until after you’ve moved in.

Less choice of location: You can choose the location if you buy a custom home or shop for homes with previous owners. With an inventory home, the lot is pre-selected. It might be closer to the road or have fewer south-facing windows than you’d like. It also limits your choice of neighborhood. If you want to be in a certain school district or live near family, you might have to compromise if you choose an inventory home.

Inventory home vs. custom-built homes

Inventory and custom homes are both brand-new—no wear and tear or dated features. The materials are new, and the design is up to date. The main difference is you’re in control when you build a home from the ground up.

Because an inventory home is almost ready, the experience is more like buying any other house on the market.

If you’re deciding on an inventory versus a custom home, start by considering your timeline for moving. Do you need to be out of your current home in a fixed time frame?

Also, think about how much time you have to invest in decision-making. Building a new home involves hours of decision-making and coordinating with builders. If you don’t have the bandwidth to consider every detail, from bathroom fixtures to where the bedrooms go, an inventory home might be the best solution.

Are inventory homes worth it?

Inventory homes are generally best for buyers who want to move within a few months but want a brand-new house.

“If you’re looking for a new home and are willing to sacrifice some customization and flexibility to get a lower price point, then an inventory home may be a good option for you,” said Matt Teifke, the founder and CEO of Austin Real Estate Brokerage in Austin, Texas. “However, if you have specific needs or wants in a home, such as a certain floorplan or lot size, you may be better off opting for a custom home.”

Conclusion

Inventory homes are good options, especially if you love new construction but don’t want to make every decision for a custom home. You might sacrifice the option for top-quality materials, but those are changes you may be able to make later.

If you’re unsure, talk to a real estate professional or contact a local developer. Tour inventory homes in your area and see for yourself, then make an informed decision.

Your perfect home is worth the time.