Why Soft Costs Are Important to Consider When Building a Home

Most homebuyers understand the ‘hard costs’ of a new house – the bricks-and-mortar. They can see a line item on the budget for marble countertops, hardwood flooring, lighting fixtures…and understand the cost and benefit of their choices. 

These are usually easy conversations to have with your client – they’re guided by their taste and expectations…and are usually predictable expenses for any large-scale building project

But what about the soft costs? Do you find yourself struggling to explain those details to a potential client? As a real estate developer, are you looking for ways to minimize your soft costs so you can get your buyers into affordable housing…while still realizing some profit?

Let’s talk about soft costs…and how our off-site building model can save your clients money, and give you a competitive advantage in the real estate market.

Is it a hard cost or a soft cost?

First, let’s quickly review the difference between hard and soft costs.

Hard costs encompass the goods and labor directly related to the structure you’re building. They include expenses such as:

  • Materials
    • Concrete
    • Lumber
    • Drywall
    • Hardware
    • Flooring
    • Fixtures
  • Labor
    • Demolition
    • Excavation
    • Site grading
    • Building trades
    • Site supervision
  • Landscaping
    • Soil
    • Turf
    • Fertilizer
    • Masonry
    • Water features

Soft costs include the intangible – but unavoidable expenses  – on any construction project, whether it’s a subdivision, townhouse, apartment building or single-family dwelling. 

They include fees for services such as:

  • Architecture
  • Engineering
  • Permits
  • Inspection
  • Licensing 
  • Accounting
  • Taxes
  • Legal
  • Maintenance
    • Building
    • Landscaping
    • Security

These costs can be a challenge to explain and justify to a client. But with off-site – or prefabricated – construction you have an opportunity to trim these soft costs and ease a difficult conversation with cost-saving solutions.

How does offsite construction save you money?

We’ve talked about trimming your hard costs with offsite construction. The precision and efficiency of our manufacturing facility ensures that every piece of lumber, every sheet of plywood, is used to the best advantage. We’re constantly working to minimize waste in our facility.

In addition, the ready-to-assemble nature of the product we deliver results in time saved onsite. This is especially valuable when skilled-labor shortages are impacting building trades across the country. You don’t need a journeyman carpenter to frame the home…it’s been done in our shop using the most advanced technology and our skilled team. 

The planning we do in-house using 3D software – before the first board has even been cut on the factory floor – means fewer, if any, surprises for your skilled tradesmen onsite. The plumbers, electricians, finishing carpenters…they’ll know what to expect once we leave the home framed and ready for lock-up. And that saves you money.

Soft costs can be minimized, too. Consider expenses like dumpster pulls – not as appealing to sell to your client as choosing laminate countertops over granite when they’re looking for cost savings. But since the trusses and walls were manufactured in our factory using efficient, laser-guided milling machinery, the waste won’t be onsite. 

And since our homes can be assembled quickly and efficiently, the need for onsite supervision is reduced, as well. You can reduce layers of contractors and subcontractors…and reduce your soft costs.

Our high standards for architectural integrity, our knowledge of current building codes, and our understanding of the inspection process streamline the licensing and approval stages of your building project.

Another soft cost you can save: your time.

Whether you’re a real estate developer, real estate agent or a private home buyer, opting for a prefabricated home reduces a vital soft cost: your time.

Building affordable, quality homes is our specialty. We’ve invested the time and resources into finding the best possible way to help people in our communities turn the keys on a new home since 2008. We’ve done the legwork so you don’t have to…your time is a valuable resource. We’re here to help you make the most of it.

If you’d like to learn more about how our offsite construction can save you time and money – both with hard and softs costs – we’d like to hear from you

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