Key Takeaways
- Funnel narrowed: $66K-$198K → $99K-$149K → $115K-$127K.
- Preliminary was 2% above detailed—within ±20%.
- Bids bracketed the detailed estimate.
- Each level served its decision purpose.
Following an estimate from walkthrough through final budget, demonstrating the accuracy funnel.
Level 1: Screening (±50%)
1,550 SF at $85/SF = $131,750. 70% Rule: max purchase $53,750. Listed at $145K—schedule walkthrough.
Level 2: Preliminary (±20%)
Assemblies total $98,300 + markups = $124,289. Revised max offer $61,211. Negotiate toward $130-$135K.
Level 3: Detailed (±5%)
After acquisition at $133K: 47-line estimate = $96,450. Three bids: $94.2K-$103.8K. Selected at $98.5K. Total budget $120,666.
| Level | Construction | Budget | Range |
|---|---|---|---|
| Parametric | $131,750 | N/A | $66K-$198K |
| Assemblies | $98,300 | $124,289 | $99K-$149K |
| Detailed | $96,450 | $120,666 | $115K-$127K |
Estimate progression
Key Takeaways
- ✓Funnel narrowed: $66K-$198K → $99K-$149K → $115K-$127K.
- ✓Preliminary was 2% above detailed—within ±20%.
- ✓Bids bracketed the detailed estimate.
- ✓Each level served its decision purpose.
Sources
- RSMeans/Gordian Residential Cost Data(2025-01-15)
- NAHB Construction Cost Survey(2025-01-15)
Common Mistakes to Avoid
Skipping the parametric screening step and jumping to detailed estimates for every property
Consequence: Hours spent on detailed takeoffs for properties that fail basic profitability screening
Correction: Use the parametric screen first—if the property passes, invest time in preliminary and detailed estimates
Not comparing contractor bids against your independent detailed estimate
Consequence: No basis for evaluating whether bids are reasonable, too high, or suspiciously low
Correction: Develop your own detailed estimate before soliciting bids to serve as an independent benchmark
Test Your Knowledge
1.How did the accuracy funnel narrow in the case study?
2.How close was the preliminary estimate to the detailed estimate?
3.What purpose did the parametric estimate serve?