The Student Handbook to T HE A PPRAISAL OF R EAL E STATE 1 Chapter 18 Building Cost Estimates

Student Handbook to T HE A PPRAISAL OF R EAL E STATE Chapter 18 2 Cost Data Sources Cost estimating services  Marshall and Swift  R.S. Means  Etc. Cost index trending  The subject cost $750,000 to build seven years ago, so it should cost $875,000 today.

Student Handbook to T HE A PPRAISAL OF R EAL E STATE Chapter 18 3 Cost-Estimating Methods Comparative-unit method  Usually done by appraisers  Usually done with a cost per square foot Unit-in-place method  Reflects individual parts of construction with all trades and components represented in that part included  For example, the cost of a linear foot of wall in place, including all costs

Student Handbook to T HE A PPRAISAL OF R EAL E STATE Chapter 18 4 Example of Unit-in-Place Method of Estimating Reproduction Cost

Student Handbook to T HE A PPRAISAL OF R EAL E STATE Chapter 18 5 Cost-Estimating Methods, continued Quantity survey method  Estimating cost based on every part and every cost  Very time-consuming and not usually done by appraisers

Student Handbook to T HE A PPRAISAL OF R EAL E STATE Chapter 18 6 Problems Suggested solutions begin on page 428.

Student Handbook to T HE A PPRAISAL OF R EAL E STATE Chapter 18 7 Problem 6

Student Handbook to T HE A PPRAISAL OF R EAL E STATE Chapter 18 8 Problem 6

Student Handbook to T HE A PPRAISAL OF R EAL E STATE Chapter 18 9 Problem 7