Appraisers say they’re not getting enough help when they try to value homes with green features.
Appraisers frequently ask for ratings information, blueprints, and specifications of properties’ conservation features but are not provided the information—either because those involved in the home’s remodeling, construction, sale, or financing mistakenly believe the information isn’t applicable to the appraisal process, or because the data aren’t available, says Joseph C. Magdziarz, MAI, SRA, president of The Appraisal Institute, the nation’s largest professional association of real estate appraisers.
Magdziarz acknowledged that misconceptions about green valuation exist among many non-appraisers, including a failure to realize that cost does not always equal value.
“It’s not yet clear how well the market recognizes the actual or perceived benefits of a green building,” Magdziarz said. “Do potential buyers view green features as enhancements to a property’s market value or as over-enhancements? The answer likely depends on the particular property and the local real estate market.”
Magdziarz pointed out that that appraisers don’t determine the market; they reflect what’s happening in the market.
“If appraisers have access to the data they need, they can produce more reliable opinions of value,” he said. “Then builders and consumers would begin to see the return on investment, and the demand for new green construction could increase. This will drive the market toward a more sustainable building process, which holds immeasurable environmental benefits for all involved.”
Source: The Appraisal Institute