Certified Residential Appraiser Practice Exam

What is the primary concern of contractor's overhead in property development?

1. Site management expenses

2. Material purchasing

3. Construction labor costs

4. Marketing fees

The correct answer is: Site management expenses

The primary concern of contractor's overhead in property development focuses on site management expenses because these costs are crucial for ensuring that the project runs smoothly and efficiently. Site management involves various responsibilities, including supervision, planning, coordination of subcontractors, and maintaining safety standards on the construction site. These expenses can significantly impact the overall budget of the project, and if not managed effectively, they can lead to delays and cost overruns. Understanding site management is vital for contractors to maintain control over the project’s timeline and quality of work, which ultimately affects the project's success. While material purchasing, construction labor costs, and marketing fees are also important components of a construction project, they are typically viewed as direct costs, whereas overhead encompasses the indirect costs associated with managing those direct costs effectively.