Seeing Green | Appraisal Institute Offers Help for Appraisers on Sustainability Features
For years an important consideration in commercial construction, the trend toward greater energy efficiency and sustainability in residential buildings has recently gained momentum, as home buyers increasingly look to save energy costs and, in some cases, reduce their carbon footprint. Most people are familiar with Energy Star appliances, but newer innovations like smart home technology and “net-zero” homes have greatly accelerated the sustainability trend.
The often-sizable investments in green home technology have created a need to properly account for them when it comes time to sell the home. To assist appraisers, as well as real estate agents, lenders and others, the Appraisal Institute (AI) has published a new guide to its “Residential Green and Energy Efficient Addendum.” The Addendum, which AI first released in 2011, is intended to accurately convey those features of a home related to energy efficiency and sustainability. According to AI, the addendum is mapped to the Real Estate Standards Organization and the Mortgage Industry Standards Maintenance Organization, which enables data to be transferred to the MLS and secondary mortgage market portal.
As noted by AI President James L. Murrett, “The addendum affects how a valuation professional might use facts to implement a meaningful comparable sales search to arrive at a market value comparison.” The 41-page guide, which like the addendum is available to download for free from the AI website, provides definitions, examples and even sample language to capture the valuable green and energy efficient features of a home that might be otherwise overlooked. “The Appraisal Institute encourages professionals to use this guide to help successfully complete the addendum,” said Murrett.