Questions to ask builder & realtor about spec home?

[Kama Ward]

I'm meeting with a builder Tuesday morning about building two spec homes. My listing agent for another deal bought a house with four extra lots on it. She said she has another money person who wants to build on two and do I want to do the other two? I do not know this agent well. She suggested the builder.

I'm naturally cautious about these things, but want to check out what they are proposing.

What questions should I be asking during this meeting?

Here are a few details. The lots are worth about 30K each (i'm sure of this). The area is desirable with new homes being built on infill lots. These lots are flat with street frontage in the city. Almost all the new homes built in this area are 'green'. The price extremes are 175K to 350K. Most new home sell for 225-275 and are in the 1300-1600sqft range. I had previously talked with a different builder- who has a excellent reputation from multiple trusted sources and builds in the area- about building a green home with low grade but acceptable finishes. He quoted 100-105sq ft. This is lower than the finishes you would want for the best sale.

The builder I'm meeting is based in the next county over (30-40 min driving). This market is devastated compared to mine. His website shows high end homes built for a different older, more conservative buyer. No mention of green. This makes sense for that market and that my realtor would have a relationship with him, she was based in that county for many years.

My realtor mentioned a 50-50 split and that I would not pay for the lot until closing. This was in passing while we were talking other unrelated matters, so I didn't get the details. I don't like the sound of it.

What criteria would you need to go forward with this deal?

Thanks for the help. If you send me the questions, I promise I will ask every one and report back on what they say. That should be a good learning experience!