The Cost Approach – Part 2
This is the second in a series of three articles about the Cost Approach appraisal method. In this article, we will review some useful appraisal tools and resources that can assist you in creating your Cost Approach estimates. In our third and final installment, we’ll show you how you can easily integrate a cost approach estimate in your next ClickFORMS appraisal.
Easy-to-use Cost-Approach tools and resources
In our last article we described the benefits of the Cost Approach method and when it should be used. In this edition, we’ll look at some tools and resources that can help you with the process of creating your own Cost Approach appraisals quickly and easily.
Every appraiser has different needs, preferences, and ways of working. Fortunately, there are several Cost Approach books, CDs, and online resources to choose from to meet your unique requirements. Whether it’s a tutorial or reference guide, having the right tool on hand to answer your questions can help you get started as well as boost your productivity.
Handy Reference Guides and Manuals
Residential Cost Handbook from Marshall and Swift
This comprehensive reference provides cost data for estimating basic single-family site built homes, low-rise multi-family apartment buildings, manufactured homes, older homes, town houses, duplexes, and even urban row houses. Using clear and easy-to-understand definitions of basic residential styles, photographs and illustrations, you can distinguish between six residence quality levels, ranging from low to excellent.
Also included are expanding depreciation tables, estimated lives of replaceable building components, insurance exclusions, architects' fees, construction time, insulation requirements as well as climate classifications.
Tip: The customized forms provided in this manual guide you through the data collection and calculation process and assist you in the completing your cost approach valuations.
N.A.D.A. Manufactured Housing Appraisal Guide & CD
This popular appraisal guide, which uses the Fannie Mae and Freddie Mac approved cost approach, is used by more lenders, insurance companies, retailers and federal/state agencies than any other mobile, modular and manufactured housing publication. The N.A.D.A. Manufactured Housing Appraisal Guide provides 40 model years of information on more than 750 manufacturers and over 6000 trade names. To simplify the valuation process, detailed, market specific data and in-depth adjustment guideline tables are also provided. This package set also includes a CD-ROM with built-in dynamic calculators and printable reports. This price guide and CD-ROM set simplifies the task of accurately obtaining market-reflective pricing in today’s dynamic manufactured housing market.
Convenient Online and Computer-based Resources and Tools
CD – Residential Estimator 7 from Marshall and Swift
This easy-to-use Windows® application enables you to create unlimited cost approach reports. With access to accurate costs on every type of residence, and extensive coverage of component costs, Residential Estimator 7 will help you produce accurate reports quickly and efficiently.
Simply enter the assignment-specific building data into the specified fields and let the program pull all related cost figures, calculate totals and produce entire reports. A key resource to your business, your annual subscription fee of $709.95 includes quarterly updates and unlimited use of our free technical support services.
Residential Estimator on the Web from Marshall and Swift ($8 per transaction)
This web-based version of Residential Estimator allows you to easily create Standard, Short, Input Listing and Depreciation cost reports as well as Form 1007 for FHA and HUD appraisals for single-family and low-rise multi-family residences, townhouses and duplexes. And with real time data updates you can rely on current and accurate data, prepare cleaner, sharper reports and have the confidence that your cost estimates are reliable and accurate.
Residential Estimator on the Web allows you to simply pay-as-you-go for the calculations you need. Your credit card will automatically be charged after each session. You can even re-calculate and make adjustments to your report for 7-days at no charge.
Tip: SwiftEstimator charges are calculated per section. One section may be all that is needed to complete a building report. There may be cases where more than one section is needed to complete an estimate.
SwiftEstimator for ClickFORMS
SwiftEstimator, with its seamless integration with ClickFORMS, enables users to use the Cost Approach method to accurately verify market-based valuations, project construction costs, adjust estimates for unique physical property features and monitor real estate markets.
ClickFORMS combined with the web-based version of SwiftEstimator provides an integrated solution that eliminates the complexity of using the Cost Approach to determine property value. Creating standard, short, input listing and deprecation cost reports is a breeze using the SwiftEstimator online forms and intuitive user interface. And Form 1007 for FHA and HUD appraisals for single-family and low-rise multi-family residences, townhouses and duplexes are quick to create and later adjust as new information becomes available.
More information on how SwiftEstimator for ClickFORMS can help enhance your Cost Approach appraisals is coming in our next edition of ClickTalk.
Fannie Mae Manufactured Home Appraisal Report Addendum (Form 1004C)
In an effort to enhance the quality of manufactured home appraisals, Fannie Mae requires that a detailed and supported cost approach be added to all manufactured housing appraisals. Now when completing the Manufactured Home Appraisal Report Addendum (Form 1004C), appraisers must qualify their opinions surrounding the quality and condition of the manufactured home in question, meanwhile providing lenders with additional information, and improving the financial institution’s ability to underwrite.
The link to the Fannie Mae’s Form 1004C listed above provides useful information and background on these cost approach requirements.
Coming in our next edition: Learn how to integrate a cost approach estimate in your next ClickFORMS appraisal.
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