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: 944

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

Home Energy Pros

Home Energy Pros was founded by the developers of Home Energy Saver Pro (sponsored by the U.S. Department of Energy,) and brought to you in partnership with Home Energy magazine.  Home Energy Pros is sponsored by the Better Buildings Residential Network.

Latest Activity

Profile IconAnand Natarajan and Bill Collinge joined Home Energy Pros
15 hours ago
Scott Stubbs added a discussion to the group Energy Auditing Equipment for Sale, Trade or to Purchase
Thumbnail

Retrotec Commercial & Residential Blower Doors $4800

My business no longer has the need for my Retrotec blower door equipment so I am selling both the…See More
16 hours ago
Chris Stratton replied to Linda Wigington's discussion Weigh in - Honorable Mention? 2nd Base? Half-Way There? 50% Better? On the Path? in the group 1000 Home Challenge
"I like that idea. Giving people as many options to engage as possible (without overwhelming them)…"
18 hours ago
Colin Genge posted an event

Duct Testing 101 Webinar at Online

July 2, 2015 from 1pm to 2pm
•Testing for Energy Code or envelope performance •Measure a known hole to prove to yourself you and…See More
19 hours ago
John Proctor commented on Mariusz Chorazy's blog post Think Your AC Won’t Make it Through the Summer San Antonio TX? We’ve Got the Fixes
"Correction -- according to the most definitive study I know of the median life is 20.5 years. 63%…"
22 hours ago
Linda Wigington replied to Linda Wigington's discussion Weigh in - Honorable Mention? 2nd Base? Half-Way There? 50% Better? On the Path? in the group 1000 Home Challenge
"Chris Another faster option in the interim could be to post a You-Tube video on how to use the…"
yesterday
Linda Wigington replied to Linda Wigington's discussion Weigh in - Honorable Mention? 2nd Base? Half-Way There? 50% Better? On the Path? in the group 1000 Home Challenge
"Ted -  That is why the 1000 Home Challenge has two options for determining a project's…"
yesterday
Empower Efficiency added 2 discussions to the group Job Board
yesterday

© 2015   Created by Lawrence Berkeley National Laboratory.

Badges  |  Report an Issue  |  Terms of Service