Green Home Appraisals Move Forward

Home appraisals have traditionally ignored the value added by green building features, but a new form would aid appraisers in documenting green features—particularly energy-saving equipment and assemblies. The form is an optional addendum to Fannie Mae Form 1004, the most widely used appraisal form for mortgage lending purposes, and provides space for detailed descriptions as well as value calculations and analysis.

Homeowners should not necessarily expect value calculations to be equal to initial investments in green features, however: local real estate markets drive appraisals. Quantifiable features like energy savings from efficient appliances and HVAC equipment, solarphotovoltaic (PV) and hot water systems, and high-performance windows will be valued based on the time frame of their cost savings. Other features, such as low-VOC carpeting or FSC-certified flooring, will add value only if there is precedent within the regional market.

Release of the form follows the Appraisal Institute’s training program for valuing green attributes in buildings (see “Valuing Green—Appraisals to Include Environmental Features,”

EBN June 2011). To download the addendum forms, go to www.appraisalinstitute.org.

– Evan Dick