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Valuing “Green” Homes

Valuing “Green” Homes

Over the past few months, the Appraisal Institute has been stressing the need for appraisers qualified for the valuation of Green or High-Performance homes and commercial properties. They see a strong demand for appraisers in this field and are offering several seminars covering the subject for both residential and commercial appraisers.

The Appraisal Institute offers Professional Development programs to real estate appraisers on cutting-edge, problematic, or advanced-level topics. Topics for professional development programs cover a body of knowledge in a specialty allowing participants to obtain educational competency in a property type or specialty area. One of these areas is the Valuation of Sustainable Buildings.

Participants who are eligible and who successfully complete a program will be placed on the Program’s Registry. Completion of a program shows potential clients and employers that participants have completed education and passed related course exams in the particular specialized topic.

Albert F. Chanese, MAI, recently completed this program and is now listed on the Registry as having successfully completed the program and now meets the education competency requirements under USPSP.

The Valuation of Sustainable Buildings consists of two one day course and exam. The course covers the six elements of green buildings which are:

  1. Site
  2. Water
  3. Energy
  4. Indoor Air Quality
  5. Materials
  6. Operations and Maintenance

Because most homes do not fit all of these categories, the preferred term is “High-Performance Homes”. In order to properly value these homes, an appraiser should know what to look for and how they add value. The course points out that many appraisers give little or no value to this these mainly due to their lack of knowledge and understanding.

The Appraisal Institute sees a trend in the development of High-Performance homes over the coming years as the new generation of home buyers, which are more socially conscience about the environment and renewable energy, entering the market.

The National Association Home Builders recent released and article Valuing Green Homes for What They’re Worth”, where they discuss the lack of qualified appraisers in the valuation of Green Homes. They are working with the Appraisal Institute in an attempt to educate appraisers.

The Connecticut Green Bank in Rocky Hill recently put out an RFQ looking for appraisers who are experienced in the valuation of Green Homes. (Connecticut Lender Seeks ‘Green’ Appraisers)

As this trend grows, it is important the lenders use qualified appraisers who take the time to educate themselves and are experienced in the valuation of High-Performance homes. Over the past several months of we’ve come across several homes that have added elements to reduce energy cost, reduce water consumption and lower maintenance cost. These items save money and add value and should be accounted for in the appraisal.

If your appraiser is not qualified, call us at 732-853-0271. Al Chanese has been involved in real estate for over 40 years, from new construction to valuation of residential and commercial properties. His staff of well trained professionals can assist you in all your real estate appraisal needs.

Posted on 12 May