Appraisal Institute Agrees to Work with State of Colorado on Valuing Green Homes
October 8, 2012 08:00 AM
CHICAGO (Oct. 9, 2012) –The nation’s largest professional association of real estate appraisers today announced it has signed a memorandum of understanding with the state of Colorado to promote a wide use of tools to document home energy features. The groups also will jointly develop valuation studies.
The Appraisal Institute will work with the Colorado Energy Office to identify Colorado market-specific trends in energy valuation. The organizations plan to collect information about the impact of energy efficiency on the residential real estate market and to share that data as trends emerge.
“As a leader in green valuation, we are pleased and honored to be part of this agreement,” said Appraisal Institute President Sara W. Stephens, MAI. “This effort is part of the Appraisal Institute’s mission of providing leadership in the real estate valuation profession, including in emerging areas such as valuing green and energy-efficient features.”
The memorandum of understanding, signed by Colorado Gov. John Hickenlooper and Appraisal Institute CEO Frederick H. Grubbe, seeks to address a need for data in valuing homes with green and energy-efficient features. In addition to aiding appraisers, that data can help consumers decide which improvements to pursue as they seek to maximize the value of their homes.
“Understanding the market reaction to high performing homes is a key component of the Colorado Energy Office’s residential efforts,” said Peter Rusin, residential program associate at the state agency. “The agreement sets out a process that will allow the state to work with experts in the field to develop credible case studies, data sets and resources for residential appraisers.”
Working with the state of Colorado is the most recent example of the Appraisal Institute’s leadership in green valuation efforts:
Since June 2008, the Appraisal Institute has offered nearly 275 individual courses on green and energy-efficient valuation, and almost 4,900 attendees have participated.
In October 2011, the Appraisal Institute endorsed the federal Sensible Accounting to Value Energy (SAVE) Act, which would improve the mortgage underwriting process by ensuring energy costs are included. Sponsored by Sens. Michael Bennet, D-Colo., and Johnny Isakson, R-Ga., the SAVE Act would instruct federal loan agencies to assess a borrower’s expected energy costs when financing a house. IMT also is among the bill’s supporters.
In September 2011, the Appraisal Institute released the Residential Green and Energy Efficient Addendum, the first form of its kind intended for appraisers use. It is an optional addendum to Fannie Mae Form 1004, the appraisal industry’s most widely used form for mortgage lending purposes. The Appraisal Institute’s addendum allows appraisers to identify and describe a home’s green features, from solar panels to energy-saving appliances.
The Appraisal Institute in January 2011 launched the Valuation of Sustainable Buildings Professional Development Program, educating appraisers on the intricacies of valuing high-performance residential and commercial buildings. All three courses have been approved for continuing education by the U.S. Green Building Council. A fourth course – on solar valuation – will debut in February.
The Appraisal Institute contributed to the Green MLS Tool Kit, issued in April 2010. The tool kit was created to help Realtors add a green initiative to their local multiple listing service. The tool kit provides guidance on enhancing data in the MLS, empowering appraisers to make well-supported comparisons, analyses and adjustments.
Published by the Appraisal Institute in June 2010, "An Introduction to Green Homes" by Alan Simmons, SRPA, LEED AP, provides the appraiser with an overview of programs, organizations and products that relate to environmentally responsible building and remodeling.
The Appraisal Institute and the Institute for Market Transformation issued guidance for green valuation – “Recognition of Energy Costs and Energy Performance in Real Property Valuation” – at a forum hosted in May 2012 by the American Council for an Energy-Efficient Economy.
In January 2012, the Appraisal Institute announced its support for PV Value, a spreadsheet developed by Solar Power Electric and Sandia National Laboratories that assists appraisers and others seeking to establish the value of a property’s solar-powered features.
The Appraisal Institute in October 2011 sponsored a report that outlined ways to finance $150 billion per year in energy efficiency projects that yield double-digit financial returns. “Energy Efficiency Financing: Models and Strategies” by Capital-E and partner organizations found that within 10 years, investment at this level would save U.S. businesses and households $200 billion annually and would create more than 1 million new full-time jobs.
The Appraisal Institute was among the sponsors of the Vancouver Valuation Accord, an agreement to address the interrelationship of sustainability and valuation that was signed March 2007 in Vancouver, British Columbia, Canada.
Click here to read the Appraisal Institute’s memorandum of understanding. Learn about the Colorado Energy Office at its website.
# # #
Subscribe to the Appraisal Institute’s RSS feed to stay connected with the latest news from the Appraisal Institute, and follow us on Facebook, Twitter, LinkedIn, YouTube and our blog, Opinions of Value.
The Appraisal Institute is a global membership association of professional real estate appraisers, with nearly 23,000 members in nearly 60 countries throughout the world. Its mission is to advance professionalism and ethics, global standards, methodologies, and practices through the professional development of property economics worldwide. Organized in 1932, the Appraisal Institute advocates equal opportunity and nondiscrimination in the appraisal profession and conducts its activities in accordance with applicable federal, state and local laws. Members of the Appraisal Institute benefit from an array of professional education and advocacy programs, and may hold the prestigious MAI, SRPA and SRA designations. Learn more at www.appraisalinstitute.org.