While some appraisers have made green valuation part of their practice, others are probably aware of energy-efficient properties and features but haven’t considered pursuing professional opportunities in this area.
For valuation professionals who are on the fence about whether it’s worthwhile to expand their knowledge and skills, consider that according to the U.S. Green Building Council there are as many as 150,000 LEED-certified green housing units worldwide, a number that more than doubled between 2011 and 2013.
Additionally, McGraw Hill Construction survey results of builders and remodelers showed that in the single family market, those firms dedicated to green building – doing more than 90 percent of their projects green – is already at 19 percent and by 2018 it is expected to double to 38 percent.
To support appraisers who are pursuing green valuation opportunities, the Appraisal Institute expanded its Valuation of Sustainable Buildings Professional Development Program’s online registries of residential and commercial appraisers. The registries, found on the Appraisal Institute’s website, now list the names of AI Designated members, Candidates for Designation, Practicing Affiliates, Affiliates and non-AI professionals who have successfully completed the courses in the program. Further, the National Association of Home Builders encourages lenders to consider requiring the use of an appropriately qualified appraiser to value green properties, citing the Appraisal Institute as a solution for training on valuing green properties and in finding an appraiser who is qualified to understand its real market value.
Education is certainly a key component to a positive green valuation experience for appraisers and consumers, but lenders also play an important role. However, some underwriters have limited knowledge of high performance and challenge anything outside the norm such as an energy-efficient adjustment.
If the borrower does not clearly identify the property as high performance, chances are the appraiser choice will not be appropriate. This is where AI has played an important role by providing the market with a tool that is currently underutilized – the organization’s Residential Green and Energy-Efficient Addendum. When used properly, it will notify the individual ordering an appraisal that it requires someone with expertise in this property type. AI also created a Commercial Green and Energy-Efficient Addendum for those property types.
Along with lenders, builders can also help by encouraging the lender to join them on a tour of the home so high performance features can be pointed out and preparing the borrower to communicate with the lender that they expect an appraiser with experience in green and energy efficiency.
Appraisers, the education is available to you and the earning potential exists. For those professionals already involved in this space, share a comment below about your experiences.