Part 8 Flashcards
(12 cards)
Comparative unit method
most commonly used cost estimating method, used to derive a cost estimate in terms of dollars per unit of area or volume based on known costs of similar structures that are adjusted for market conditions… geo…
Cost index trending
index service- known historical cost to current cost
Direct costs (hard)
Labor & Materials
Entrepreneurial incentive
the amount an entrepreneurial expects to receive ($)
Entrepreneurial profit (loss)
market value – total cost of development
Indirect costs (soft)
architectural & appraisal
Quantity survey method
all materials, all categories of labor, are estimated and unit cost figures are applied to arrive at a total cost.
Replacement cost
the estimated cost to construct, at current price as of a specific date, a substitute for a building or other improvement, using modern materials and current standards, design, and layout.
Reproduction cost
the estimated cost to construct, at current prices as of the effective date of the appraisal, an exact duplicate or replica of the building being appraised, using the same materials…
Unit-in-place method
the total building cost is estimated by adding together the unit costs for the various building components as installed.
Gross living area
the total area of finished, above-grade residential space.
8 Step process for the cost approach
- Estimate the value of the site as though vacant and available (HABU)
- Estimate the direct/indirect costs of the improvements
- Estimate entrepreneurial incentive.
- Add 2 & 3 to obtain total current cost
- Estimate depreciation (Physical deterioration, Functional obsolescence & External obsolescence)
- Deduct depreciation from total cost
- Add the contributory value of any improvements
- Add the site value to the total depreciated cost.
