A Solution for Appraisers--the Weak Link

"Money makes the world go 'round," goes the old saying, and it's certainly true in the world of residential energy efficiency.  Many worthy home House and dollar sign symbolsenergy upgrade projects are cancelled or put on hold because the owners feel they won't get their investment back if they should sell soon.  Likewise for new construction, many builders in the speculative home market feel forced to build to the lowest performance standard, because energy upgrades won't "appraise out."

Plainly put, the appraisers are not doing their job, which should be to give a valuation adjustment for each feature of the home that is either above- or below-average, as compared to recent comparable sales in the area.  Is it right for a house to receive additional value for granite countertops, glass mosaic tile and a whirlpool tub, but no additional value for a 95% efficient furnace, 19 SEER air conditioner and third-party verification to a high performance national certification?  Of course not, but that is the current state of affairs.  However, help is on the way......

Residential Green and Energy Efficient Addendum

The Appraisal Institute recently released a three-page form called the Residential Green and Energy Efficient Addendum to collect information about energy efficient and green features, such as insulation values, efficiencies of heating and air equipment, high peformance windows, geothermal heat pumps, ENERGY STAR qualification or a HERS Rating, etc.  The form is meant to be used by appraisers, lenders, home energy raters and builders.  The Appraisal Institute is encouraging Fannie Mae and Freddie Mac to use the form and even request it from appraisers.  This form should be extremely helpful by somewhat formalizing the process, and also by educating all of the stakeholders.

If Your House is Above-Average.......Say So!

Few people realize that they have a right to request that their lender assign an appraiser who is skilled and competent at performing valuation adjustments for energy efficiency features.  It is perfectly acceptable to provide documents and information to the lender or appraiser about features of your home that you think are above average.  It is the appraiser's job to verify that information, and give it an appropriate value.

While the appraisal industry may be getting a little pressure to change from above, it certainly won't hurt to apply some pressure from the grassroots.  For your next involvement in any aspect of a special, high performance home, remember to put the Residential Green and Energy Efficient Addendum in someone's hands, and say, "This house is above-average......price it that way!"

 

(originally posted on Home Energy Consultants Blog).

Views: 981

Comment

You need to be a member of Home Energy Pros to add comments!

Join Home Energy Pros

Comment by Bud Poll on October 1, 2011 at 4:24pm

Hi Gary,

Just wanted to say nice post and certainly a step in the right direction.  I have a couple of real estate agents that need to see this.

Bud

Videos

  • Add Videos
  • View All

Twitter

Latest Activity

Crosbey Archery liked Crosbey Archery's blog post How to improve the air quality in your home ?
6 hours ago
Crosbey Archery replied to Don Hynek's discussion Testing "Magic Pak" units?? in the group Multifamily Buildings
"second-floor (and higher) units without humping a ladder all the way around the building is a very…"
9 hours ago
Colin Genge posted events
18 hours ago
Profile IconJon Turnbaugh, Lights N More and John Kamas joined Home Energy Pros
18 hours ago
Amber Vignieri posted a blog post

Relay Network Targets Multifamily Housing Upgrades Nationwide

Affordable apartment buildings are home to more than 10 million American households, making them a…See More
20 hours ago
Tom White's video was featured

Robby Schwarz on Builder Collaboration

Hear Robby Schwarz, of EnergyLogic discuss the value Owens Corning brings to Thrive Home Builders.
yesterday
Crosbey Archery liked Don Hynek's discussion Testing "Magic Pak" units??
yesterday
Crosbey Archery joined Norm Bourassa's group
Thumbnail

Multifamily Buildings

For too long there has been relatively little EE focus on multifamily, but some new programs have…See More
yesterday

© 2016   Created by Lawrence Berkeley National Laboratory.   Powered by

Badges  |  Report an Issue  |  Terms of Service