Residential and commercial green and energy-efficient properties have generally become increasingly common over the past few years. Appraisers who expand their expertise in this area may attract opportunities for green valuation assignments.
A key element to appraising high-performance properties is ensuring appraisers are provided with all relevant information relating to energy-efficient features. By doing so, residential and commercial appraisers can thoroughly analyze the property, make appropriate judgments related to energy performance and help lenders understand their collateral risk.
Here are five free green building resources that can offer insight and opportunities for appraisers:
- Sandra K. Adomatis, SRA, interviewed with Builder magazine and discussed the Home Energy Rating System, which is important when trying to understand green building appraisals. She discussed how the housing market has trouble valuing HERS and energy efficiency improvements in general. She suggested that a HERS rater or a knowledgeable builder can fill out the Appraisal Institute’s Residential Green and Energy Efficient Addendum report, to assist in developing a credible, reliable opinion of value.
- In May 2018, the Appraisal Institute released “A Guide to the Residential Green and Energy Efficient Addendum.” This guide helps appraisers, real estate agents, energy and green raters, lenders, builders, the secondary mortgage market and sustainability organizations understand how each section of the addendum applies to valuation and marketing of the property.
- Woody R. Fincham, SRA, AI-RRS, wrote an article for the Appraisal Buzz in 2019. He discussed high-performance homes and why it is important to work with experienced green professionals. He also offered resources and advice for how appraisers can help themselves become competent in green valuation.
- The National Green Building Standard™ is the first residential green building standard to undergo the full consensus process. The 2020 edition of ICC 700-2020 National Green Building Standard® builds on more than a decade of green-building experience and offers several new opportunities and increased flexibility for remodelers and appraisers. The NGBS can be downloaded for free here: https://bit.ly/30kGOE8.
- On the commercial front, the Appraisal Institute and Institute for Market Transformation created the Green Building and Property Value guide. This guide helps appraisers understand the four components of value–revenue, occupancy, operating expenses and risk–and how green technology fits in. This guide also shows how those four elements can be identified through valuation tools.
Appraisers, and others, can find more green building resources by visiting the Appraisal Institute’s website, or contacting a Designated Member of the Appraisal Institute using the organization’s Find an Appraiser directory.