Post by ogeezer on Jun 20, 2007 11:32:50 GMT -6
In todays home building industry, people are forever asking me about the actual costs for having a specific home built for them, particularly pertaining to costs averages for the various phases. While each custom home is different, meeting special needs or conveniences associated to individual wants, on average home building costs are divided into two groups, hard costs and soft costs.
Hard costs relate to the material and labor going into the actual construction; while soft costs pertain to everything else. Planning, shopping around, and individual tastes can reduce or heighten hard costs. But this is the one area home buyers, especially those having a custom home built, serving as owner-builders or thru independent contract builders where real savings are earned.
Typically, these are the average percentages of hard costs of a home:
Excavation = 3 %
Structural Concrete = 7 %
Framing = 23 % -- Floors, Walls, Sheath, Trusses
Roofing = 3 %-- 3-tab asphalt shingles
Windows = 4 % -- Vinyl to energy code
Plumbing = 5 % -- Rough and Finish
Electrical = 5 % -- Rough and Finish
HVAC = 5 % -- Rough and Finish
Masonry & Siding = 5 % -- Walls and Exterior Trim
Insulation = 2 % -- Floors, Walls, Ceiling
Drywall = 5 % -- Hang, Tape, Finish, Texture
Sewer Hook-up = 1 % -- Ditch and Connectors
Water Hook-up = 1 % -- Ditch and Connectors
Paint/Stain = 2 % -- Interior and Exterior
Milworks = 12 % -- Cabs, Counter, Doors, Trim
Garage Door = 1 % -- Door with Openers
Floor Coverings = 7 % -- Vinyl and Carpet
Appliances = 4 % -- Standard Brand in White
Deck = 1 % -- Structural and Finish
Storm water = 1 % -- Gutters, Downspouts, Drains
Exterior Concrete = 2 % -- Garage Apron and Sidewalk
Final Grade = 1 % -- General blade work
The soft costs are even more difficult to estimate because they are in proportion to the hard costs. In other words, the higher cost of building creates higher costs in order to build. As an owner-builder, or when employing a General Contractor or custom home builder, significant savings can be realized, depending upon your personal involvement (what you do) in the project. Negogiate for the best deal, shop around, or hire a construction manager to oversee the construction is usually the best way to avoid the high fees charged by builders. Getting involved in the soft cost portion is where you save a bundle, enabling you to put more in the home than would otherwise happen with a spec-home builder.
Soft costs include:
All Permits = 8 %
Builder's Overhead and Profit = 25 %
Site Survey = 1 %
Off-site Utilities = 10%
Clean-up and Recycle/Refuse = 1 %
State Sales Tax, Home Registration Fees, etc = 8 %
Landscaping = 2 %
Architect/Designer's Fee = 10 %
The preceeding soft costs mite seem confusing but reflect the percent of cost when applied to the sum total of hard costs. For instance, for a projected hard cost estimate of $100,000, your soft costs would increase the project budget by an additional 65% (or $65,000). The total cost of your construction project including hard costs and soft costs would be $165,000.
Your greatest savings in Soft Costs is derived from expenses applied to the portion, Builder's Overhead & Profit. Serving as your own builder will greatly dimenish those costs, put won't zero them out. Managing your own project will have costs, how you manage those costs will save you a bundle.
Typical Soft Costs associated with the Builder's Overhead & Profit portion, include the following:
Phone, Fax, Mail = 5%
Outdoor Toilet = 5% -- safe, sanitary facility for workers
Office Equipment, Supplies = 5%
Rental Equipment, Tools = 5% -- not otherwise provided by contractors.
Automobile Gas, Maintenance = 5% -- travel from office to jobsite
Temporary Heat, Power = 5%
Builder's Bond/Liability Insurance = 5%
Miscellaneous Hardware = 5%
Job Shack = 5% (not really reqd for owner-builder projects)
Overhead Labor = 10%
Bid/Negotiations = 5%
Superintendent = 20% -- this can go to paying for your const. mgr
Profit = 20%
For instance, if the Soft cost of the example shown earlier is $65,000, the Builder's Overhead & Profit section comes up to about $25,000. If you hire a const. mgr to oversee the actual construction and completion of a project, you should not pay more than $5,000 for his service, excluding the other costs. The rest, well, a frugal owner-builder should be able to save a pile of money in all these areas if he/she plans ahead, and stay on top of the home building project costs.
Hard costs relate to the material and labor going into the actual construction; while soft costs pertain to everything else. Planning, shopping around, and individual tastes can reduce or heighten hard costs. But this is the one area home buyers, especially those having a custom home built, serving as owner-builders or thru independent contract builders where real savings are earned.
Typically, these are the average percentages of hard costs of a home:
Excavation = 3 %
Structural Concrete = 7 %
Framing = 23 % -- Floors, Walls, Sheath, Trusses
Roofing = 3 %-- 3-tab asphalt shingles
Windows = 4 % -- Vinyl to energy code
Plumbing = 5 % -- Rough and Finish
Electrical = 5 % -- Rough and Finish
HVAC = 5 % -- Rough and Finish
Masonry & Siding = 5 % -- Walls and Exterior Trim
Insulation = 2 % -- Floors, Walls, Ceiling
Drywall = 5 % -- Hang, Tape, Finish, Texture
Sewer Hook-up = 1 % -- Ditch and Connectors
Water Hook-up = 1 % -- Ditch and Connectors
Paint/Stain = 2 % -- Interior and Exterior
Milworks = 12 % -- Cabs, Counter, Doors, Trim
Garage Door = 1 % -- Door with Openers
Floor Coverings = 7 % -- Vinyl and Carpet
Appliances = 4 % -- Standard Brand in White
Deck = 1 % -- Structural and Finish
Storm water = 1 % -- Gutters, Downspouts, Drains
Exterior Concrete = 2 % -- Garage Apron and Sidewalk
Final Grade = 1 % -- General blade work
The soft costs are even more difficult to estimate because they are in proportion to the hard costs. In other words, the higher cost of building creates higher costs in order to build. As an owner-builder, or when employing a General Contractor or custom home builder, significant savings can be realized, depending upon your personal involvement (what you do) in the project. Negogiate for the best deal, shop around, or hire a construction manager to oversee the construction is usually the best way to avoid the high fees charged by builders. Getting involved in the soft cost portion is where you save a bundle, enabling you to put more in the home than would otherwise happen with a spec-home builder.
Soft costs include:
All Permits = 8 %
Builder's Overhead and Profit = 25 %
Site Survey = 1 %
Off-site Utilities = 10%
Clean-up and Recycle/Refuse = 1 %
State Sales Tax, Home Registration Fees, etc = 8 %
Landscaping = 2 %
Architect/Designer's Fee = 10 %
The preceeding soft costs mite seem confusing but reflect the percent of cost when applied to the sum total of hard costs. For instance, for a projected hard cost estimate of $100,000, your soft costs would increase the project budget by an additional 65% (or $65,000). The total cost of your construction project including hard costs and soft costs would be $165,000.
Your greatest savings in Soft Costs is derived from expenses applied to the portion, Builder's Overhead & Profit. Serving as your own builder will greatly dimenish those costs, put won't zero them out. Managing your own project will have costs, how you manage those costs will save you a bundle.
Typical Soft Costs associated with the Builder's Overhead & Profit portion, include the following:
Phone, Fax, Mail = 5%
Outdoor Toilet = 5% -- safe, sanitary facility for workers
Office Equipment, Supplies = 5%
Rental Equipment, Tools = 5% -- not otherwise provided by contractors.
Automobile Gas, Maintenance = 5% -- travel from office to jobsite
Temporary Heat, Power = 5%
Builder's Bond/Liability Insurance = 5%
Miscellaneous Hardware = 5%
Job Shack = 5% (not really reqd for owner-builder projects)
Overhead Labor = 10%
Bid/Negotiations = 5%
Superintendent = 20% -- this can go to paying for your const. mgr
Profit = 20%
For instance, if the Soft cost of the example shown earlier is $65,000, the Builder's Overhead & Profit section comes up to about $25,000. If you hire a const. mgr to oversee the actual construction and completion of a project, you should not pay more than $5,000 for his service, excluding the other costs. The rest, well, a frugal owner-builder should be able to save a pile of money in all these areas if he/she plans ahead, and stay on top of the home building project costs.