Greenway Properties

New Addendum Could Help You Get More Money For Your Homes Green Features

October 25, 2011

in anouncements,Appraisal,Green

Since 2007 I have been giving talks all around the state asking the question “why can’t we get appraisers to assign value to the green features our clients put in their homes?” Until recently the only real green based appraisal criteria we had was a quote from the Journal of Appraisal stating that for every $1 in annual energy cost reduction you get from a green feature you gain $20 in market value. So if you install energy efficient light bulbs that save you a total of $100 a year you can add $2,000 to the value of your home. As you can see that was not a very helpful or nuanced approach to valuing the green features in a home. Now the Appraisal Institute has answered the call and produced a Residential Green and Energy Efficient Addendum.

This three page document gives the appraiser a form to list the green features that are present in the home and, hopefully, force them to take the next logical step which is to assign a market value to those features based on their savings and local market forces. The form is a really good first crack at green appraisals, they didn’t stop short at just listing the features, they have gone deeper allowing you to list the age of the solar panels, the monthly savings results produced and the type an R value of added insulation. These are important details in determining the efficacy and the market value associated with these green features.

 

What does this mean to you, the homeowner? It means that if you are selling or refinancing your home you need to request that the appraiser use this addendum and let them know that you will be expecting to see a filled out copy of it included in the appraisal. You can then use this form and the valuations associated with it as a marketing tool for your home. It could help you recoup lost value due to market forces by gaining value for the energy efficient upgrades you have done to your home. If your home is certified by a green rating agency such as Green Point Rated or LEED it gives you another place to list that and try to gain market value for having taken that step as well. Even more importantly, it means when your water heater goes out and you are standing at Home Depot deciding between a traditional tanked water heater or the more expensive tankless option and you are calculating the energy savings and trying to decide whether it justifies the increased purchase price, you have yet another reason to make that green purchase–you can have it listed on your appraisal and get some greater market value for your home based on it.

While this will take a while to be widely used it is  a great first step and we should all ask that it be used on our purchases and refinances.

 

If you’d like to see the form you can view it here:  Residential Green and Energy Efficiency Addendum

–Rich Curtis

Owner, Greenway Properties

 

 

 

 

 

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