Do your garage cost calculations consider things like higher walls and roofs or 2 X 6 construction?

Q. Do your garage cost calculations consider things like higher walls and roofs or 2 X 6 construction? 

A. To answer that question, we must briefly review the "Replacement Cost" concept and quickly explain our philosophy.  

First, it is essential to remember that estimating Replacement Cost New (RCN) in the Cost Approach does not require estimating the replacement cost of what currently exists (this is a common misconception). Instead, we are called on to calculate the cost of a market-suitable "replacement" (a structure having usefulness equivalent to the building being appraised).   

For this reason, increases in quality, such as you described, should only be reflected in the replacement cost to the extent that they contribute to value. For instance, if the higher walls/roof contribute value (due to the ability to store larger vehicles), the quality rating should be increased to reflect that. By the same token, if the 2 x 6 walls do not result in any contributory value, then the cost of these items should not be included in Replacement Cost – or - Reproduction Cost should be used, and the cost of the 2 x 6 walls should be deducted as functional depreciation (as this item is adding cost without adding value). Clearly, "Replacement Cost" is a more straightforward method because it allows you to remove the cost of super-adequate items (and the resulting functional depreciation) upfront. 

It is important to note that we are not stating whether either item contributes or does not contribute value. As the local expert, you are the only one qualified to determine whether these items contribute value and the extent to which they do. A simple check on that issue is whether you are adjusting for the items in your sales comparison analysis (either on a separate grid line or in the quality ratings/adjustments). 

Since inception, our mission has been to create a service that allows you to quickly and accurately calculate Replacement Cost New (RCN) while requiring you to input ONLY the information vital to developing an accurate RCN based on your observations regarding overall quality. You are the local expert – you have seen the property – and you are in the best position to rate the quality of a dwelling – much like you do in your appraisals with the UAD “Q” ratings. Our scale, though, gives you many more options to "fine-tune" the rating.  

If we were to add a significant number of detailed questions to each step in the process, we would be unnecessarily costing out a "replica" and adding a substantial amount of time to the process. In other words, we would be "the other guys."