Earth Advantage introduced the nation's first high performance homes appraisal addendum to value the unique attributes of energy efficient and sustainable homes in 2011, with the support of Energy Trust of Oregon. We've recently updated and improved this appraisal addendum, which is attached here and available for anyone to use.
The
High Performance Homes Cost Addendum is simply a means of documenting the increased property value due to the energy efficient and sustainable measures installed in the home that qualify as above code construction. Appraisers can assign additional value to a home's appraisal provided they have credible documentation to support the additional value. This appraisal addendum enables builders and Realtors to assign dollar values to the above code high performance home features in a house, many of which are unseen by the appraiser, and communicate the energy label score and third party certification level of the home, if applicable, to the appraiser.
New additions to this version of our High Performance Cost Addendum include a simpler more condensed format, new fields to record the date of certification and energy label information, and a more robust section to describe the value of existing solar or solar ready systems on site.
Since we introduced the first high performance homes appraisal (cost) addendum we've updated it several times, and other organizations, such as SEEC LLC and the Appraisal Institute, have also released high performance homes appraisal addendums. Earth Advantage builders, and our appraiser education advisors, like using the EA Addendum because it asks for only the most pertinent
, readily accessible data. However, if you have a unique property priced at a premium, or are just having a hard time with appraisals justifying your sales prices, we encourage you to ask your lender for a qualified appraiser (i.e. one that is knowledgeable in green building practices and values) and to utilize the high performance homes appraisal addendum that best suits your needs.
Through our education department's extensive experience training appraisers on how to value high performance home features, and our building certifications department's experience working with builders to utilize this appraisal addendum, we have three basic recommendations to assure you get the highest possible appraisal for your energy efficient and sustainable home:
1) Ask the lender for a qualified appraiser. The secondary mortgage market -- Fannie, Freddie, and FHA -- require that an appraiser deem themselves "competent" before accepting an assignment, so you have the right to an appraiser that’s familiar with how to appraise your high performance property. If they don’t have a list of green designated appraisers, recommend the following registries:
2) Communicate with the appraiser. Send them any information, ideally data such as comps and this High Performance Cost Addendum, as soon as you can. The appraiser is likely going to do some research before coming out to the property, so help them with data that supports the valuation of your home as early as possible in their research.
3) Meet the appraiser at the subject property. Have a company representative who is knowledgeable about green building practices meet the appraiser at the home with a completed copy of this High Performance Homes Cost Addendum. Bring an energy label, or third party certification, for the home along with you if you can. Even if the home hasn't had it's final Earth Advantage inspection, we'll provide our builders with a preliminary Earth Advantage certificate and a preliminary EPS (Energy Performance Score) from Energy Trust of Oregon so the anticipated energy costs to operate the home can be substantiated to the appraiser.
Finally, if you're building Earth Advantage certified homes please call your Green Building Consultant for help on overcoming low appraisals. They're happy to speak with appraisers to explain the value of the Earth Advantage Home Certification program, energy labels, and the specific green attributes of your subject property.
