Builders and Building Owners Now Realize Their Appraisal Value Challenge

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This week I had the privilege of speaking to the Home Builders Association of Greater Austin at their Green Boots 2013 event, “Marketing, Valuing & Financing Green Homes.” Green Boots is a residential green building education series, sponsored and developed by Austin Energy, offering basic and advanced sessions presented by the Central Texas green building community.

The luncheon presentation was “Green Appraisals,” and the audience was hungry to hear all about what can be done to improve the appraised value of high-performance homes. Their keen interest was not surprising, because the biggest roadblock in green projects today is the appraisal value, and credible data supporting improved economic returns. The appraisal valuation is the most critical component in both real estate and mortgage industry transactions and is especially important with energy efficient projects.

Lenders, appraisers, REALTORS®, and all building owners need a way to establish premium pricing for high-performance buildings. My presentation outlined how Green Energy Money (GEM) presents tools and data available to assist appraisers to get the highest value for green features. GEM‘s Green Appraisal methods and information encompasses quantified utility baseline analysis; the Energy Audit Report, and the Appraisal Institute‘s Green Energy Addendum; and if available, 12 months of previous utility data. I also explained what forms are available to provide information, other types of acceptable documentation, and how certain regions implementing the Green MLS tool database of comparable values can be utilized to support quantified 3rd party certification and analysis.

The GEM Green Appraisal Method adheres to standard underwriting and appraisal guidelines in the current market, but it also allows for expansion and evolution well into the future. These simple but dramatic shifts in quantified reporting methods have had a positive impact that will continue to be far-reaching. The GEM Green Appraisal Method is important in the adoption of new standards and guidelines of quantified data for appraisals. We hope that our methodology will be quickly adopted and standardized nationally. Many appraisers just don‘t know how to quantify or analyze high-performance building measures in their analysis; that‘s why GEM is training appraisers and developing an accredited continuing education curriculum for appraisers with the tools to adopt an industry-accepted model and standard.

For further reading on the subject of green appraisals, see one of my earlier blog posts, “The New Green Appraisal Movement and How It Can Help Property Owners.”