Help sellers get fair value for home’s ‘green’ features

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Most MLSs don’t include ‘green fields’ in data input forms

BY KEN HARNEY

A “green” home can save owners plenty of money on their utility bills. But when it’s time to sell, do investments that reduce a home’s energy use receive fair value in the marketplace?

Before you answer that, here are three quick questions on green real estate to ponder:

  • Can a seller truly get fair value for his or her home if energy-saving and green upgrades are totally ignored in the appraisal — even if they cost thousands of dollars and save tons of money on utility bills? I believe the correct answer is no.
  • Is a Realtor who lists a house with significant green and high-performance features properly representing the seller if he or she doesn’t at least help compile data on those features and ideally attaches a “green and energy efficient” addendum — readily available free online — to the listing? Again, the answer is no.
  • And is a bank or appraisal management company complying with professional competency standards if it assigns the appraisal of a home with important green features to an appraiser with no training or experience whatsoever in this area? A resounding no!

The reason I bring these questions up is that last week the Appraisal Institute, the largest group representing real estate appraisers, issued a revised version of its “Residential Green and Energy Efficient Addendum,” including a practical new online tool to compute the market value of solar photovoltaic (PV) systems. The addendum is an important resource for anyone who believes energy-conserving capital investments in real estate deserve to receive fair value in the marketplace. Continue reading…