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: 936

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.

Latest Activity

Susan E. Buchan posted a status
"EEBA 2015 Conference Call for Papers extended! New deadline: 3/6/15 at 5 PM CT Submission details: www.eeba.org/conference/call-for-papers"
16 minutes ago
Casey Gesell replied to Casey Gesell's discussion Looking for home improvement companies to join our dealer network!
"Hi Patrick, What is your time frame for relocating? Would you be interested in operating in the…"
1 hour ago
Todd Collins replied to Patrick Michaelyan's discussion Vinyl Siding with Integral Insulation
"Keeping air from getting into the wall assembly is important - so answer to your question air…"
2 hours ago
Sean Lintow Sr replied to Patrick Michaelyan's discussion Vinyl Siding with Integral Insulation
"You might want to check out BSC (Joe Lstiburek) perfect wall assembly As for builders & new…"
3 hours ago
Patrick Michaelyan replied to Patrick Michaelyan's discussion Vinyl Siding with Integral Insulation
"Todd, I've heard much said about this over the years. Quite frankly, my understanding of…"
3 hours ago
Todd Collins replied to Patrick Michaelyan's discussion Vinyl Siding with Integral Insulation
"might want to consider vapor permeability.   Need to move the dew point out far enough to…"
10 hours ago
bill lazar replied to robert jones's discussion Should your local weatherization company be required to have someone BPI certified on their staff?
"all this will be clarified soon with the new SWS guidelines mandated by DOE- but just WZ…"
11 hours ago
Glen Gallo replied to Brady Mills's discussion Can someone recommend a whole home water filtration system?
"I was in the business of cleaning up water at one point. We produced spot free pressure washers of…"
13 hours ago

© 2015   Created by Lawrence Berkeley National Laboratory.

Badges  |  Report an Issue  |  Terms of Service