Costs paid to professionals for services to improve a premises.
Expenses paid for intangible items such as appraisals, credit report, land survey, market/feasibility study, business plan, closing fee, etc.
Costs, other than acquisition and construction/rehabilitation, which are incurred while holding unimproved property or during construction. Soft costs may include, but are not limited to, such items as carrying charges (interest, real estate taxes, and ground rents), professional service and audit fees, offering plan/prospectus costs, surveys, relocation expenses, insurance, assessment, mortgage insurance premiums, inspection, recording and filing fee, not-for-profit developer's allowance, FNMA/GHMA fee, mortgage recording tax, and title examination costs.
Freight, labor, software, training and other intangible items are considered soft costs. Most funding sources will only allow a certain percentage of the total transaction to be soft costs. These costs usually cannot be recovered in case of default and therefore increase the riskiness of the deal.
In a lease transaction, leased assets which are considered to be "intangible" (software, services, consulting, training, etc.) rather than tangible (hardware, equipment, facilities, etc.).
Labor, software, freight, and other intangible articles are often defined as soft costs. A large number of funding sources will only allow a specific percentage of the entirl transaction to be soft costs. These costs increase the inherent risk of the lease because they generally can not be recovered in case of default.
Non-hardware or other non-liquid acquisition costs of Lessor. For example, training, shipping, service, or installation charges.
Architectural, engineering, and legal fees, as distinguished from land and construction costs.
are those costs that are indirectly incurred. Soft costs do not actually, physically go toward construction. Overhead such as the project engineers salary, the administrative costs, legal fees and architect fees are soft costs
Professional costs of construction, e.g., architect or engineering fees. It may also include financing and overhead costs.
Intangible costs, such as computer software, training and delivery.
Cost of items that are to be financed that relate to items other than equipment. Typically these items have no value by the end of the lease term. Typical soft costs include; installation, service, and start-up.
Include costs such as an appraisal, home inspection, property tax, legal fees, etc.
Costs of constructing a building or other development project, other than the costs of building the actual physical structure.
Freight, software, labor and other intangible items are frequently defined as soft costs. Many funding sources will only allow a certain percentage of the total transaction to be soft costs. Because these costs can generally not be recovered in case of default, they increase the inherent risk of the lease.
These variable costs generally include supervision, overhead and profit. Some of the less obvious soft costs include architect's fees, and debris removal and disposal.
