Building Estimate vs Appraisal
The difference between a building estimate and appraisal is important. The appraisal is an evaluation of what your building costs. What can you sell it for? An estimate is what it’s going to cost to build that building.
It is simple. The appraisal is what is a building is worth. The building estimate is what it’s going to cost to build the building. And there is value to both of course. But their purposes are very different. It’s also very important to be able to understand how you can get an accurate cost and building estimate.
Database of Costs and Economic Factors
Here is one thing to consider too. You also have current databases of costs available to build a building. There are different databases that cost estimators come up with. Also, the other one is to be able to speak to contractors that are actually doing a building estimate out there.
Another one that is very important is to consider the economic factors in the nation. Moreover, these economic factors are very important. Say construction is varied or the construction market is also very strong. Then you’re going to have an escalation in construction costs that affects the building estimate. Also, the other part is that if the location of their construction is far away in a remote area. In that case, there is going to be a premium in taking materials in labor to these places. Which is also key to being able to build that structure that you have in mind.
Estimating at Twentynine Palms
I’ll never forget that I was designing a facility, the Marine Base at Twentynine Palms. And they asked me, a very young architect too. I’m not even sure I had my license yet. But I was also still learning the process. They asked me what it costs to replace a door. And I looked at my building estimate databases – it was going to be X amount of dollars. I’ll never forget my boss at that time. He laughed at me while saying, “you really think it’s going to cost whatever, $200 to replace this door?”
Who do you think would drive all the way out to the Marine Base of Twentynine Palms to remove that door? And load up this one heavy-duty door and go over and install it too? Remember, he’s also going to have to drive. That is part of the building estimate. He’s going to have a vehicle where he can accommodate the oversized door too. Also, he’s going to have to pay for fuel. And stay out there, because it’s so far. But it’s time to get stunned. He’s not going to move the drive back.
Building Estimate and Overhead
There are going to be building estimate costs incurred while incurring an overhead as well. There is an overhead that’s going to be two or three or four times more than what the simple door would cost to install. Those are things that you need to consider in doing a good cost estimate.
If your building estimate is too low, well that’s a nice problem to have. Because then you’ve got extra money to be able to build more. There’s also not much that you can do. The best-case scenario is that you are under budget too. Also that you have a little bit more of a contingency to be able to deal with the unforeseen circumstances.