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The world around us is evolving, and so is the real estate industry. One significant transformation we’re witnessing is the move towards green and sustainable homes. More homeowners are now looking for residences that aren’t just cozy and well-located but also environmentally responsible. This shift isn’t just a fleeting trend—it’s here to stay.
If you’re a real estate appraiser or someone curious about the industry, you might wonder: “Why should I pay special attention to green homes?”
Well, allow me to share some of my findings with you.
The Value Behind The Green
“We already know that consumers prefer greener homes because they save money, conserve resources, and provide greater comfort and health benefits,”
Quote from Karin Burns, Executive Director of Build It Green.
According a study supported by Build It Green in 2018, revealed some interesting facts. Green-certified homes in California, for instance, fetched a higher sales price. In fact, they observed homes with green labels fetching prices that were, on average, a significant 2.19% higher than homes without such credentials.
To put this into perspective, the green labeled homes in their study was $1,192,250, so that’s a whopping $26,110 extra in value. Impressive, isn’t it?
Now add to that the allure of a “greater resale value”. These benefits are hard to overlook, both for homeowners and professionals in the real estate industry.
Want to be recognized as a green home valuation expert? Click here to check out the Certified Green Home Appraiser Program from McKissock Learning. (**) This designation can help appraisers distinguish themselves from their peers by obtaining advanced knowledge and skills specific to appraising green and high-performance residential properties.
Why Appraisers Should Care?
While the desire for green homes is increasing, this same study also highlighted that the ROI on green homes could be even higher if some key market barriers were removed. Notably, the lack of proper documentation and scoring of green features has held back the industry from realizing the full potential of green home sales.
So if you’re an appraiser, why should you care about all this green stuff? Below are a few valid points from the National Association of REALTORS:
1) Government & Major Financial Institutions’ Requirements:
Fannie Mae, Freddie Mac, and FHA have stipulated that appraisers need to consider the energy-efficient features of a home. If these features warrant an adjustment in the appraised value, appraisers must factor this in.
Appraisers who fail to take energy-efficient and green features into account might simply be overlooking them due to a lack of awareness. It’s imperative for appraisers to be attuned to these features to provide accurate valuations.
Moreover, these institutions require lenders to choose appraisers who possess the necessary expertise to appraise specific property types, especially when it comes to green or energy-efficient homes. Appraisers who aren’t competent in this niche may find themselves at a disadvantage when financial institutions are selecting appraisers.
2) The Uniform Standards of Professional Appraisal Practice (USPAP):
USPAP, as determined by the Appraisal Standards Board (ASB) of The Appraisal Foundation, defines the “competence” requirements for appraisers. If an appraiser wants to ensure they adhere to these standards, it’s crucial they expand their knowledge to include green homes.
The guidelines set by professional bodies such as these often become the industry standard. Not adhering to them can put appraisers at a professional risk.
How Do Appraisers Equip Themselves with “Green” knowledge?
There are quite a few organizations that would provide education programs on “green appraisals.” Of course, we should always go with the ones that are trustworthy and reputable.
While the National Association of Realtors (NAR) offers a Green Designation program, to my understanding, most of their members are sales agents, so I’m unsure how much of their teaching materials are tailored toward real estate appraisers.
On the other hand, McKissock Learning, where their primary business is in providing appraisal education, they have a Green Home Appraiser Certification program which is specifically designed for appraisers who wish to become a Certified Green Home Appraiser (CGHA).
The Certified Green Home Appraiser (CGHA) program will cover:
- Green Building Concepts for Appraisers (7 hours)
- Valuation of Residential Green Buildings (4 hours)
- Valuation of Residential Solar (3 hours)
The best is this program can qualify for 14 hours of continuing education credits. Since you need to complete the CE credit in order to renew the appraiser license anyway, so why not take something that can enhance your competitive edge in the industry?
On a side note, to my understanding, the North Carolina Appraisal Board does not grant CE credit for courses less than 3.5 hours. So the 3-hour course would just be used for meeting the CGHA certification requirements, but not the license renewal.
Want to be recognized as a green home valuation expert? Click here to check out the Certified Green Home Appraiser Program from McKissock Learning. (**) This designation can help appraisers distinguish themselves from their peers by obtaining advanced knowledge and skills specific to appraising green and high-performance residential properties.
(**) Affiliate Disclosure: Please note that some of the links above are affiliate links, and at no additional cost to you. Our company, JCHQ Publishing will earn a commission if you decide to make a purchase after clicking on the link. Please understand that we include them based on our experience or the research on these companies or products, and we recommend them because they are helpful and useful, not because of the small commissions we make if you decide to buy something through the links. Please do not spend any money on these products unless you feel you need them or that they will help you achieve your goals.
Disclaimer: The information in this post is for general information only, and not intend to provide any advice. They are subjected to change without any notice, and not guaranteed to be error-free. Some of the posts on this site may contain views and opinions from individual not related to JCHQ Publishing. They do not necessarily reflect our view or position.
Reference:
- National Association of REALTORS- Guide to Appraisals (source)
- Earth Advantage- Accredited Green Appraiser (AGA) (source)
- McKissock – Green Home Appraiser Certification (source)
- Green Communities- Green Appraiser (source)
- How to find green appraiser (source)
