Dec
20


Does Being Green Add to the Value of Your Home?

Tuesday, December 20, 2011

THE TREES have lost their leaves, it is getting dark earlier and temperatures are below freezing. Now is the time to talk about the advantages of adding GREEN to your home. Not the Christmas holly, but using green products to increase the energy efficiency of your home.

A pressing question has always been, “How does spending the extra money on energy-efficient products help the value of my home”? It is nice to lower heating bills, but how long does it take to recoup the expense of some of these products?
There is now a way to capture these improvements and assign them a value in an appraisal. Real estate appraisers finally have a new form that helps standardize the way that energy efficient features are included in their reports. Until now, Fannie Mae, Freddie Mac and the Federal Housing Administration used a form that centered on maintaining sound lending practices but did not have a way to capture what energy-efficiency improvements contributed to the value of a home. Including a narrative of any green features in a description box was not always viewed by the lending institution.
In 2009, Fannie Mae prohibited mortgage brokers or loan officers from selecting an appraiser or having direct contact with them. However, realtors, buyers or sellers can meet with and can provide extra information directly to the appraiser.  Lenders should request the new appraisal form and sellers should fill out the form with all pertinent information. Realtors should include it in their listing data on the MLS for easy access by appraisers or for other agents who have buyers that are looking for the most energy efficient home. Agents can also meet the appraiser at the home to provide relevant comparable sales information.
GreenWorks Realty prepared a report using NWMLS data of new homes sold from Sept 2007 through February 2010 comparing homes that sold with an environmental certification and those without a certification. According to the collected data, environmentally certified homes in Seattle sold for 9.2 percent more per square foot in 24 percent less time and make up 34 percent of the market.
A nationwide survey by the Shelton Group released in 2006 found that “78 percent  of U.S. consumers say they would choose one home over another based on energy efficiency.”
Most new home builders are adding green features because they know that is what consumers are looking for. They can advertise extensively any energy saving features that they build-in to their homes For the re-sale market to compete, home owners should look at adding some of these features when they are doing any type of remodeling. Now, especially since appraisers have the opportunity to add value to each upgrade in a consistent manner, return on investment has improved.
Beside the high cost additions of heating systems, appliances and windows, there are many low cost upgrades that will help to add value to a home and can now be highlighted in an appraisal:
Adding insulation to attics, exterior walls and floors
Installing a whole house fan
Sealing ducts and air leaks
Improving water efficiency with low-flow toilets, shower heads and faucets
Installing a more efficient water heater
Installing landscaping that requires little or no irrigation
A pressing question has always been, “How does spending the extra money on energy-efficient products help the value of my home”? It is nice to lower heating bills, but how long does it take to recoup the expense of some of these products?

There is now a way to capture these improvements and assign them a value in an appraisal. Real estate appraisers finally have a new form that helps standardize the way that energy efficient features are included in their reports. Until now, Fannie Mae, Freddie Mac and the Federal Housing Administration used a form that centered on maintaining sound lending practices but did not have a way to capture what energy-efficiency improvements contributed to the value of a home. Including a narrative of any green features in a description box was not always viewed by the lending institution.

In 2009, Fannie Mae prohibited mortgage brokers or loan officers from selecting an appraiser or having direct contact with them. However, realtors, buyers or sellers can meet with and can provide extra information directly to the appraiser.  Lenders should request the new appraisal form and sellers should fill out the form with all pertinent information. Realtors should include it in their listing data on the MLS for easy access by appraisers or for other agents who have buyers that are looking for the most energy efficient home. Agents can also meet the appraiser at the home to provide relevant comparable sales information.
GreenWorks Realty prepared a report using NWMLS data of new homes sold from Sept 2007 through February 2010 comparing homes that sold with an environmental certification and those without a certification. According to the collected data, environmentally certified homes in Seattle sold for 9.2 percent more per square foot in 24 percent less time and make up 34 percent of the market. 

A nationwide survey by the Shelton Group released in 2006 found that “78 percent  of U.S. consumers say they would choose one home over another based on energy efficiency.” Most new home builders are adding green features because they know that is what consumers are looking for. They can advertise extensively any energy saving features that they build-in to their homes For the re-sale market to compete, home owners should look at adding some of these features when they are doing any type of remodeling. Now, especially since appraisers have the opportunity to add value to each upgrade in a consistent manner, return on investment has improved.

Beside the high cost additions of heating systems, appliances and windows, there are many low cost upgrades that will help to add value to a home and can now be highlighted in an appraisal:

Adding insulation to attics, exterior walls and floors
Installing a whole house fan
Sealing ducts and air leaks
Improving water efficiency with low-flow toilets, shower heads and faucets
Installing a more efficient water heater
Installing landscaping that requires little or no irrigation





Comments subject to review.
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Estella said
"That is a beautiful shot with very good lighting ." about Women Consider Owning a Home to be a Vital Component of the American Dream
on Sunday, May 12, 2013 @ 9:57 AM

Chris White - Team Leader said
"Unfortunately you are not alone. It's more than an outcry. The powers that be really need to come down harder on Bofa than they already are. Working on these short sale for over 2 years now I've uncovered down right fraud happening on the lenders parts. If they cared more about moving this country forward than protecting their own wallets then they would cut the red tape and approve these short sales in a timely manner. Our team made the wise decision to get BofA loans which were FHA or Freddie Mac backed, approved prior to listing on the market. Then we can list the home as "Price Approved" and close in 30 days. In this instance BofA does a full appraisal, rather than an incompetent "Broker Price Opinion" (nothing against agents but they have no idea how to make adjustments on comparable homes) and then the bank issues an "Approval To Participate" letter which dictates what price we can go on the market and take anything north of 88%. I really do hope your situation improves. " about Congressional Bill to Speed Up Short Sales
on Tuesday, August 30, 2011 @ 9:15 AM

Lisa Zeiner said
"We made an offer 4 months ago to BofA, and have heard nothing. It was a cash offer which is better than the zero money they are collecting now. And since the people don't care they are trashing the place, by the time BofA gets around to it our offer will be gone as the place is a mess!! Septic issues now, garbage being dumnped. All of this could have been avoided if BofA really wanted to correct their cash flow problem and sell these properties in a timely manner. They cry about cash but then do nothing intelligent to fix the problem" about Congressional Bill to Speed Up Short Sales
on Tuesday, August 30, 2011 @ 9:06 AM

Jones Ramirez said
"Thank you for the work you have done into this post, it helps clear up a few questions I had." about How do appraiser’s determine a homes value?
on Tuesday, April 19, 2011 @ 10:07 PM

HollyRobsonf said
"Hey - I am certainly happy to find this. great job!" about Bank of America to Offer Principal Reduction to Underwater Borrowers
on Wednesday, April 13, 2011 @ 6:45 PM