Building a new home along the Grand Strand — whether in Carolina Forest, Myrtle Beach, or surfside communities — means more than picking a floor plan and a lot. One of the most common areas of confusion for buyers planning a build is the difference between hard costs and soft costs. These two categories capture nearly all expenses in a construction budget, yet they often blur together in early planning. Understanding them clearly can help buyers develop realistic expectations, prioritize upgrades, and communicate effectively with lenders and builders.
In 2026, local market conditions in the Myrtle Beach area reflect steady interest in new construction as buyers seek tailored floor plans, coastal design features, and homes that fit evolving lifestyle needs. However, rising material costs and variable site conditions make it increasingly important for buyers to see beyond base pricing and factor both hard and soft costs into their build budget.
Below, we’ll break these cost categories down in clear terms, explore where surprises most often arise, and offer practical budgeting guidance specific to the Myrtle Beach new-build context.
What Are Hard Costs?
Hard costs — also called direct construction costs — are the tangible expenses associated with physically building your home. These include labor and materials that become part of the finished structure. If you can “touch it” on move-in day, it’s very likely a hard cost.
Common Hard Cost Categories
Site Work & Grading: Clearing the lot, leveling terrain, and connecting utilities. Coastal lots often involve additional considerations for elevation and drainage.
Foundation & Framing: Concrete, wood or steel framing, and structural systems.
Exterior & Roofing: Siding, roofing materials, windows, and doors.
Mechanical Systems: Electrical, plumbing, HVAC (heating, ventilation, and air conditioning).
Interior Finishes: Drywall, flooring, cabinetry, countertops, paint, and fixtures.
Landscaping & Hardscapes: Driveways, patios, sod or irrigation (sometimes budgeted separately but still direct).
Hard costs are typically the largest portion of a build budget — often 60–70% of the total — but they can fluctuate with local labor availability and material prices (e.g., lumber, concrete, steel) that vary with broader economic conditions.
What Are Soft Costs?
While hard costs cover the physical construction, soft costs encompass the services, fees, and administrative expenses that support the build process but don’t result in physical structure.
Typical Soft Cost Examples
Architectural & Engineering Fees: Plans, structural calculations, site engineering, and design revisions.
Permits & Impact Fees: Local government charges for building permits, utility hookups, or development impact assessments.
Financing Costs: Loan origination fees, interest reserves, appraisal fees, and construction loan management costs.
Surveying & Testing: Soil tests, land surveys, environmental assessments.
Insurance & Bonds: Builder’s risk insurance, performance bonds, and other coverage during construction.
Soft costs often amount to 15–30% of a construction budget, depending on the complexity of the build and regulatory requirements in the area.
Why Buyers Often Overlook Soft Costs
Most buyers focus first on base pricing — the hard costs per square foot quoted by builders — but underestimating soft costs is a frequent source of budget overruns.
Common Misconceptions
“Permits are minor.” Permit fees in growing communities can be substantial, especially for larger homes and lots with unique site conditions.
“Design is fixed.” Custom changes during planning or construction typically come with engineering fees, redesign costs, and extended timelines.
“Financing is simple.” Construction loans require careful planning to cover interest during build time, inspections, and draw schedules.
Industry research highlights how soft costs can quietly accumulate if they aren’t identified early in the planning process. Federal consumer guidance notes that borrowers should ask for detailed breakdowns of all potential costs associated with construction financing before closing a loan.
How Hard and Soft Costs Play Out in the Myrtle Beach Market
In the Myrtle Beach and Grand Strand area, specific local factors influence both hard and soft costs.
Regional Market Considerations
Site Variability: Coastal properties may require elevated foundations to meet flood zone regulations, which increases hard costs. Lot drainage, septic evaluations, or soil stabilization may also be necessary.
Regulatory Costs: Local permit fees and impact assessments vary across Horry and Georgetown counties.
Labor & Materials: Proximity to supply hubs and seasonal labor demand can affect pricing for subcontractors and materials.
Buyers who build here benefit from getting line-item estimates early and working with professionals familiar with local permitting and construction realities to reduce surprises.
Practical Steps to Budget Accurately
Here are actionable steps buyers can take to separate and plan for hard and soft costs effectively.
1. Start With a Detailed Estimate
Ask for a comprehensive cost estimate that breaks out expenses into hard and soft categories. Too often, high-level quotes mask significant soft costs that will appear later.
2. Consult a Local Architect or Designer
Early involvement of design professionals helps capture site-specific needs and can reduce costly mid-project changes.
3. Understand Financing Impacts
Construction lending differs from traditional mortgages. Ask your lender for a draw schedule and clear explanation of interest, reserves, and fees.
4. Build Contingencies Into Your Budget
Industry guidance generally suggests a contingency reserve (5–10% of total budget) for unforeseen expenses — especially when building on unique or challenging sites.
5. Track Changes Consciously
Every design tweak or spec upgrade should be accompanied by a revised cost impact. Keeping decisions documented helps avoid sticker shock later.
Hard vs Soft Cost Examples
| Category | Hard Cost? | Soft Cost? | Typical Notes |
|---|---|---|---|
| Framing | ✔ | Major material & labor expense | |
| Cabinetry | ✔ | Selections can vary widely | |
| Permits | ✔ | Varies by jurisdiction & project size | |
| Architectural Plans | ✔ | Early investment that clarifies design | |
| Landscaping | ✔ | Often scoped after main build | |
| Construction Loan Fees | ✔ | Ask lender for full fee schedule |
Common Budgeting Mistakes and How to Avoid Them
Underestimating Utility Connections
In some Myrtle Beach neighborhoods, connecting to municipal water, sewer, or storm systems incurs separate fees and infrastructure costs. Confirm these early.
Ignoring Impact Fees
Compensatory charges for new development (such as school impact fees or traffic mitigation) are often soft costs that catch buyers off guard. Ask your jurisdiction’s permitting office for a full list of possible fees.
Skipping Soil and Environmental Tests
Especially near wetlands or water tables, soil conditions can dictate foundation type — with significant cost implications. Include professional testing early to avoid redesigns.
Wrapping Up: Clarity Leads to Control
Separating hard and soft costs is more than academic; it’s fundamental to building with confidence. In the 2026 Myrtle Beach new-construction market, buyers who budget transparently and early — understanding both tangible materials and the less-visible fees — are better equipped to stay within budget and enjoy a smoother build experience.
Whether you’re planning your first custom home or evaluating a new build with a builder or design professional, make cost clarity a priority. Early planning pays dividends in predictable pricing and fewer surprises.
Interested in building new in the Myrtle Beach area but not sure how to start your cost breakdown? Reach out for a custom checklist that outlines hard and soft costs specific to your desired community and build scope — tailored to current 2026 market conditions and local permitting standards.
FAQs
1. What are hard costs in a home build?
Hard costs are the direct construction expenses for labor and materials that become part of the finished home — like framing, roofing, mechanical systems, and finishes — typically making up the largest portion of the budget.
2. What are soft costs and why do they matter?
Soft costs are non-physical expenses such as design fees, permitting, financing fees, and engineering. They don’t result in tangible structures but are crucial for the project to move forward and can significantly affect total budget.
3. How much should I budget for soft costs?
Soft costs can range from about 15% to 30% of your total construction budget, depending on project complexity, local permitting fees, and the level of design or engineering required.
4. Why do buyers overlook soft costs?
Many buyers focus on base hard cost estimates and assume additional fees are minor. Without a detailed budget breakdown, soft costs like permits or loan fees often appear later and create unexpected expenses.
5. How can I reduce surprises in my build budget?
Ask for line-item cost estimates early, factor in contingency reserves (5–10%), involve designers and engineers upfront, and work with lenders to understand all financing-related costs.
