According to the U.S. Department of Energy, homes built to the 2012 or 2015 International Energy Conservation Code (IECC) are 15-16% more efficient than those built to the 2009 IECC or earlier. It only makes sense those homes should have a higher value.
Fannie Mae, Freddie Mac and FHA guidelines already require appraisers to consider the energy efficient features of the home, and if the market supports an adjustment in the appraised value, one must be made. But an average appraiser won’t take this into account if they aren’t made aware.
To address this variation across the industry, NAHB recently collaborated with the Building Codes Assistance Project (BCAP) and Appraisal Institute (AI) to create a guide for home builders, buyers and lenders for the valuation of homes built to today’s stricter energy codes. They can also be used as informational pieces in understanding the importance of hiring a proficient “green” appraiser and where to find them.
The guide, Appraised Value & Energy Efficiency: Getting It Right, provides important information for buyers, sellers and home builders. Energy efficiency can be overlooked in the appraisal process for a variety of reasons, but specially trained appraisers can assess the value of these features.
“Homes built to the 2012 or 2015 energy code are high-performing homes and their appraisals should reflect that. We hope this tool helps builders, buyers and lenders achieve accurate appraisals,” said NAHB Chairman Tom Woods.
Maureen Guttman, president of BCAP, agreed and said the tool simplifies and helps correct a market barrier to stronger energy codes.
The guide includes ways builders can help the buyer learn about the loan and appraisal process and help assure a competent appraiser is selected. It also provides information for lenders about hiring the right appraiser for the assignment.
One recommendation is to access the online list of qualified appraisers in the Appraisal Institute’s Valuation of Sustainable Buildings Professional Development Program Registry.
For additional information about green home appraisals, contact John Ritterpusch at 800-368-5242 x8325.