What defines the Comparative Unit Method of estimating costs?

The Comparative Unit Method of estimating costs is characterized by the practice of summing all costs associated with construction and dividing that total by the square footage of the property. This approach allows appraisers to derive a cost per square foot, which can then be applied to compare similar properties or estimate the cost of new construction based on existing market data. By utilizing this method, it becomes feasible to analyze costs in a uniform manner, which is essential for valuations in real estate and property appraisal.

This method is particularly useful for appraisers because it leverages a broad understanding of market trends and costs without the need for exhaustive itemization or detailed line-item accounting. It simplifies the appraisal process while still providing a reliable estimate for evaluating property values. Consequently, the focus is on establishing a clear cost perspective that is easily understandable and applicable in various appraisal scenarios.