Green building has been around for a quite a while now, and is clearly here to stay. However, a major obstacle continues to be proper valuation of sustainable upgrades and third-party certifications/ratings. A few years ago, the Appraisal Institute, which sets the standards of care for real estate appraisal in the US, rolled out an optional form that appraisers could use to assess the value of green features. Unfortunately, that form and the requisite training for using it is somewhat limited as a tool for comparing sustainable features and upgrades between different homes.
Separately, the Residential Energy Services Network (RESNET) has a well established index for comparing the relative energy usage of homes that has in some states, such as California, become a requirement for all new homes. The so-called HERS score or rating provides a numerical value that can be used for benchmarking energy performance.
A recent announcement from both the Appraisal Institute and RESNET will finally provide appraisers a means for incorporating HERS scores in their valuations, at least in certain states. Green Building Advisor’s Scott Gibson writes:
“One of the largest barriers to the building and selling of high energy performance homes is that the value of energy upgrades is too often not reflected in the real estate appraisal of a home,” RESNET Executive Director Steve Baden told the Insulation Institute. “Many of the features that make a home energy-efficient are hidden behind drywall and aren’t obvious to home buyers. Our goal is to make information, such as the HERS score of a home, visible in the appraisal so that consumers have more facts available to make their decisions.”
The HERS score will be added to an existing green-building addendum for appraisers, which lists such things as certification under the LEED program, or the National Green Building Standard. The Appraisal Institute will get access to RESNET’s data base of HERS-rated homes — initially in states like Texas with a larger number of HERS rated homes and in other states in the future.
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