Here is a great article on what Custom Homebuilding is from both the builders perspective and also from the clients. There are lots of great articles around the web that discuss what a custom builder is or what building a custom home is about but no too many that touch on who the clients are.
The Journey
By S. Claire Conroy
The “Great Recession” not withstanding, custom builders have had a number of competitors nipping at their heels for some time now. During the boom times, production builders stepped into the high-end market with a “have-it-your-way” approach that conned a lot of buyers into believing they were getting a custom home at mass market prices. The big builders happily would mix and match model floor plans—a first level of one mated to a second level of another. They'd swap the French Country elevation for the Arts & Crafts. They'd tick every upgrade box with glee.
But builders who construct true custom homes know this is simply mass production taken to its computer-driven extreme. A real custom home has no bulk-buy limits on what a client can order. Every choice is catered to with personal-shopper attention. Every detail is designed to fit and fabricated from scratch. Every house is a prototype, with all the potentials and challenges that entails.

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Among this genre of houses, nothing is more challenging than the “art house.” It is the crème de la custom home, a house where the goal is to achieve new aesthetic heights—to experiment with site, program, materials, and engineering. It's the high-wire act of the residential construction field—the Mount Everest summit, the Evel Knievel daring leap. It's not for the faint of heart or for those with a conservative attorney on retainer. These projects are for builders who are bored with doing the same old luxo-barge with granite counters. These builders are risk takers with a fire for the ultimate achievement in their chosen profession.
The clients for these houses are different, too. They are fully engaged in the enterprise. This journey is their creative zenith as well, and they may not really want it to end. Half the fun for them is getting there. These are the houses where the client, architect, and builder end up as friends for life.
These are true custom homes. And no matter what tricks production builders come up with next, they will never, ever manage to take their home buyers on a ride like this. If you build luxury production houses, anyone with good management skills can do what you do. If you build art houses, you're part of an elite minority.