IS GREEN WORTH THE GREEN?
APPRAISING ENERGY-EFFICIENT HOMES REQUIRES CLOSE COORDINATION
By Michael Dresden, President, Dart Appraisal
This article originally appeared in Scotsman Guide, September 2017
Energy costs, advances in technology, environmental concerns or the desire to be on the cutting edge all have driven advances in what are called “green” homes. A growing number of homeowners are interested in purchasing energy-efficient homes or renovating their existing homes to be greener.
Unfortunately, determining valuations for energy-efficient green homes is an area that is still fairly undeveloped. Despite progress in green manufacturing and building – and the creation of new loan products that originators can offer to help borrowers attain their dream green homes – a great deal of learning and discovery is still taking place when it comes to appraising these properties.
Some of the objectives of going green include better indoor air quality, reduced utility expenses and easier maintenance. Also, some owners probably expect their green homes to appreciate more in value over time compared to more conventional homes.
Evaluating the value of green home features and improvements can be difficult, however, which can sometimes make it tough for originators to get loans approved on energy-efficient homes. Green appraisals require close coordination between everyone involved in the lending process, from originators and appraisers to construction professionals.