Category Archives: Real Estate Transaction

‘Show Your Work’ Isn’t Just for Math Class Anymore

percent greenMy wife is a Math Teacher.  She always likes student’s papers that ‘show your work’! This NAHB Report says ‘Show Your Work’ also applies to building and selling Energy Efficient Homes.

An Early Look at Energy Efficiency and Contributory Value examined sales of homes in the greater Denver metropolitan area between January 2012 and April 2014 to determine the impact that energy efficiency has on the home buying process.

Ultimately, the authors concluded, “There is a current lack of researchable and quantifiable data … Until the data is consistently available and easy to find, it is likely that the residential appraiser’s ability to develop a credible opinion of value will be limited.

Among the observations/findings in the study:

  • The percentage of home sale listings citing “energy” increased in both local multiple listing services between 2006 and 2013, apparently indicating that such features are increasingly appealing to prospective buyers.
  • DadBabyESIn a very limited survey the authors conducted of home owners who purchased Energy Star-qualified homes, 96% indicated that if they were purchasing a home in the future, they would like the home to have an energy-efficiency rating so that they could compare it to other homes.
  • According to the authors: “Appraisers need third-party certified and verified energy-efficiency documentation.” Determining a home’s energy efficiency is “beyond the normal scope of work,” knowledge and experience of an appraiser.
  • Although the survey was not intended to estimate property values based on the presence of energy-efficient elements, in most of the case studies, the presence of energy-efficiency features added measurably to the value of the home. Several of the homes featured in the case studies were certified to the ICC 700 National Green Building Standard.
  • It was difficult, and sometimes impossible, for the study’s authors to separate the value of energy efficiency measures from other green features.

NAHB actively supports efforts to educate appraisal and realty professionals about the intrinsic value of home performance, and how certifications like the ICC 700 National Green Building Standard can help non-building professionals and their customers identify high performance homes and appreciate their benefits.

Full Report

Be Proactive for a Green Appraisal

greenlightbulbWhen it comes to getting an accurate appraisal for a high-performance home, it’s easier and more practical to take the right steps up front than to try to get a low appraisal revised after the fact.

Appraisal expert Sandra Adromatis, a featured speaker at the High Performance Building Zone during the recent International Builders’ Show, offered advice for securing an accurate appraisal of a high-performance home.

First and most important is documentation, especially of features behind the walls and other items that aren’t immediately obvious.

A good place to start is by taking a close look at the Appraisal Institute’s Residential Green and Energy Efficient Addendum. This is particularly important if the home is built to a nationally recognized program like the ICC-700 National Green Building Standard or includes additional high-performance features that should be documented within the appraisal.

This article appeared on the NAHB Blog.

For the complete article

Ms. Adomatis also presented at the RESNET Conference after the IBS Show. I furnish the Energy portion of the AI Energy Efficient and Green Addendum for every new home rating I do for a builder.  If you would like to see one or see how it would help your building plans, give me a call.

Question about Builders

google_adwordsGoogle Adwords is one way to promote a product or service.  I have used their approach in the past and currently have an ad campaign going. This campaign promotes New Home Buyers asking Builders ‘What is the HERS Score!’  The HERS Score is a transparent method the Builder can use to educate the buyers, appraisers and others essential to a success of the sales transaction.

I saw an interesting Google Referral today that is worth Blogging about.

The search term used was:  “Best HERS Rated Builder in Wichita”

The short answer is, there isn’t a best builder. That is because a HERS Rating is for a specific home, not for a builder.

images-1A HERS Rating looks at the features of a specific home and evaluates how well they are installed. The builder can specify a great furnace. The quality of the workmanship that is put into installing that furnace will effect the HERS Score.  Insulation is treated the same way.

The HERS Score shows the difference between two or more homes.  A new home buyer may be best served with a HERS Index in the low 90s.  A second new home buyer may be best served with a HERS Index in the upper 70s.

That reasoning, on the best Index Score, is best covered in another post.

HERS-scaleVAny builder can choose to build with either HERS Score above. Using one or the other does not make a builder better, it means the builder is meeting the needs of the buyer.

The HERS Score is a way of demonstrating transparency from the builder to the buyer to the realtor, the appraiser and others involved in the transaction.