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Three-for-One Bonus: V2.0 of Appraisal Institute’s ‘Green & Energy Efficient Addendum’ Hits the Street

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  1. Thanks for your article. This new form is a great step forward, as a consciousness-raiser for everybody in the home sales and appraisal marketplace. The philosophy of the Appraisal Institute has been evolving for quite a while now, and it is coalescing around the idea that reductions in the cost of ownership that result from energy efficient upgrades should reflect in an increase in the retail value of the property.

    Many of our customers are Green, and this is their primary motivation. We would like to see them properly rewarded for their heightened awareness, and their service to the planet.

    The cost of ownership of a house is a combination of the mortgage, property taxes, maintenance costs, and utility bills. If utility bills are substantially lower, the seller of the house should be rewarded by receiving an amount that brings the total cost of ownership up to that of an equivalent property in the neighborhood.

    The current valuation methods suggest that, for every $1 of annual energy savings, the house should appreciate by $22 in value, at mortgage interest of 5.5%.

    Thank you for your work to educate appraisers and realtors to fair practices in Green appraisal. I would like to get more information on the Real Estate Transaction Standard Green MLS Implementation Guide, and the process of implementation. As a solar manufacturer, our customers needs a clear understanding of the methodology to get their energy-efficiency enhancements properly valued when they list their house, and where their resources are for doing this.

    My best regards for your excellent work!

  2. Mr. Gibbs… you wrote “current valuation methods suggest that, for every $1 of annual energy savings, the house should appreciate by $22 in value…”

    I love those numbers… what’s your reference? I’d love to be able to cite this.

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