How to Estimate Building Cost

Construction estimation goes from the most general to the least.

Construction estimation for home or other projects is currently a specialized field connected to home and design architecture. The basics of developing a budget estimate are challenging, but not impossible, at the general level. If you are estimating on your own, begin with a general estimate given the relevant variables and adjust as the construction commences. Your original estimate is likely to be guesswork, and accurate data will develop as the work continues.

Instructions

1. Use quantitative measures to define the order of magnitude. This deals with the size and feasibility of the project, its general location and any specific impediments to construction. At this early stage, you are dealing with the scope of the project. It is the most fundamental part of the estimation process -- a shell within which the other variables will have to fit.

2. Detail the conceptual design of the project. This stage is really filling out the general parameters of the project, dealing with objects such as the number of rooms, floors, garages, out buildings and the rest. This development also bleeds into the conceptual development of the project, which is defined by the National Institute of Building Sciences as up to 25 percent of the full detail of the project. This stage also usually includes a detailed, but preliminary, schedule of construction and a general timetable.

3. Lay out, in as much detail as possible, the less general variables, or the medium variables. Here come the nuts and bolts of the estimation process. The general concepts have been laid down and a schedule put forth. Now, basic materials are estimated. These variables include the state of the manufacturing industry in building products, their availability, the size of the order relative to the scope of the project, delivery of parts and the methods of payment.

4. Detail the final variables relative to the medium variables. This will include labor, taxes, utilities, electrical, appliances, plumbing, foundations, permits and drainage. This is the most detailed and least general of all the steps in this complex process. All of these details need to fit into the medium variables and the medium into the most general. This is a process from the least detailed to the most. Put differently, it is from the most general, "guesswork" style measurements to the actual dollars and cents of basic homebuilding materials and local government regulations.

Tips & Warnings

• Always plan for contingencies. These include allowances for bad weather, labor problems, government corruption, illness, and the non-availability of parts and materials. Equipment breaks down, gas prices go up and governments have a way of finding new regulations that increase taxes on projects. Never forget the profit margins of all actors involved.

References

• Whole Building Design Guide: Cost Estimating
• Owner Builder: Budget Estimation