032 - Hard Costs vs Soft Costs: Making Cents of Construction

Architect Exam Podcast · Aug 25, 2025 · 32m

Hard costs vs soft costs define where every dollar goes on a construction project, and understanding the difference is essential for the ARE and real-world practice.

Hard costs are the tangible expenses that create the physical building: materials, labor, equipment, and building systems. Soft costs are the intangible expenses that make the project possible: design fees, permits, insurance, financing, and project management.

This episode breaks down examples of each with typical percentages, explains how the 70/80 to 20/30 budget ratio shifts for residential, commercial, and institutional…