Valuation professionals, real estate agents and homebuyers face challenges in the process of valuing green homes. In addition to selling and purchasing green and energy-efficient homes. All due to a lack of comparable properties and a lack of data, according to an article published this in The Appraisal Journal.
The Appraisal Journal is the quarterly technical and academic publication of the Appraisal Institute, the nation’s largest professional association of real estate appraisers. The materials presented in the publication represent the opinions and views of the authors and not necessarily those of the Appraisal Institute.
“The Challenges of Valuing Green,” by Sandra K. Adomatis, SRA, LEED Green Associate, discusses the lack of consistency in sales data on high-performance homes, citing an inadequate system of keeping and sharing the necessary data to determine their value. When applied to homes, green takes on a variety of meanings, and this creates difficulty in the marketplace, leading many valuation professionals to compare “apples and oranges” when valuing a home that has been classified as green.
In addition, the author reminds valuation professionals to consider the costs of building a structure rated the “darkest” shade of green. That’s compared to a structure with a “lighter” shade rating. Marshall & Swift/Boeckh’s 2013 Residential Cost Handbook reports that the additional cost to build green instead of code ranges from 3 percent to 20 percent. This range is wide because the shade of green is a determining factor. Therefore, if a structure costs more to build, the seller usually expects to sell it at a higher price.
Also, the author advocates educating market participants and real estate agents on the value of green features. In addition to and as well as instituting uniform standards for tracking and storing data on green homes. Consequently to solve the challenges of valuing green homes. More importantly those facing those who sell, buy and provide opinions of value. All for high-performance homes.
So Adomatis is a practicing real property appraiser and consultant at Adomatis Appraisal Service in Punta Gorda, Florida. That’s where she is involved in a variety of residential and small commercial property appraisals. She is a state-certified general appraiser and has been an active Designated member of the Appraisal Institute since 1985. She earned her LEED Green Associate credential from the Green Building Certification Institute in 2013. In addition, she edited and contributed to Appraisal Institute books. Plus courses and seminars. So she understands the challenges in valuing green homes!
Furthermore, she published three previous articles in The Appraisal Journal about high-performance properties. Finally, Adomatis received the Appraisal Institute’s President’s Award in 2013. As well as in 2012 she received the Dr. William N.Kinnard, Jr. Award from the Appraisal Institute Education Trust.
Source: The Appraisal Institute
Read “The Challenges of Valuing Green” in the The Appraisal Journal.
CHICAGO (March 31, 2015)
