Why won’t the appraiser give me a higher value?

5 Ways to Maximize Your High-Performance Home Value

Have you ever asked that question, or had someone ask that question to you? If so,we'd like to share some proven strategies to help your green home receive proper valuation for a higher appraised value. As green building/energy consultants, we find ourselves being asked these questions regularly by clients - both homeowners and builders/architects/real estate professionals, and would like to share this information with you!

Maximizing high-performance home values:

Appraised value getting it right1. Most importantly, make sure the lender requests an appraiser with proper qualifications for the assignment. That way, when appraisers scan the job requests, and understand your home is different, requiring a special-property level of expertise.  This puts the ball in their court to Accept or Decline the assignment up front.  Fortunately, we have a sample letter template on our Green Real Estate Toolkit that any homebuyer, seller, builder, or Realtor can use to communicate the special nature of your home.

2. Give documentation up front.  There are many great work products on a green home including third-party ratings, certificates, reports etc. But if this information doesn't get delivered to the lenders, and subsequently to their appraiser, how will they know the home deserves consideration? It is typically the seller's responsibility (and their Realtor) to provide supplemental supporting documents. Obtain these from the green team (architect, builder, rater, etc.). If you don't give the bank any documentation, how will they know the home is special?

Bonus: A third-party certification from an energy rater, such as a HERS rating, reduces liability of the appraiser and the lender in assigning value. So certify your green home!

3. Ask for a green appraiser. While you can't choose an appraiser by name due to federal regulations, you certainly can select one by ability, competency, or expertise. There are even green directories that a lender may use to choose a properly qualified appraiser, such as Pahroo Appraisal & Consultancy  in Chicago. It's acceptable for lenders to cast a wide geographic net for an appraiser due to the limited quantity of professional appraisers who specialize in sustainable, high-performance and green properties.

4. If the lender has already selected an appraiser, and that appraiser is unfamiliar with green homes, you may be able to argue based on federal law (search the internet for USPAP Competency Rule) that a new appraiser should be selected; one that demonstrates evidence of competency, in the form of an educational seminar or previous experience appraising green homes. Again, there are directories of qualified green appraisers.

5. Finally, fill out the Green Appraisal Addendum, Guaranteed HERS Ratingwhich may be best completed not by the appraiser, but by someone knowledgeable about the building. This may be the homeowner, your architect or perhaps even your third-party rater. At Eco Achievers, we feel our role as energy/green raters positions us to accurately complete this form, and we include this in our Premium service tiers in contracts with homeowners. The Green Addendum gives the homeowner and the appraiser information in an industry-standardized form that the appraiser can include with their appraisal report. The Addendum details the high-performance/green features of the home, and submit to the bank's underwriters. If needed, this book can help you fill out this form. This step may especially be useful if the appraiser has already been selected for your home.

While these five steps won't guarantee a higher green home value, they certainly can help give you the best odds. We hope these tips help you get the value you deserve for your awesome home. For more information visit our Green Real Estate Toolkit: www.ecoachievers.com/toolkit

Did you know you can ask for a green appraiser? What was your experience appraising your green home? Please leave any comments and questions below!

 

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