Appraisal Institute Improves Tool to Aid Valuation of ‘Green’ Home Features
May 16, 2017 08:00 AM
CHICAGO (May 16, 2017) – The nation’s largest professional association of real estate appraisers today released an updated research tool to assist appraisers and users of appraisal services in understanding market reactions to green and energy efficient homes.
In updating the AI Reports® Residential Green and Energy Efficient Addendum, the Appraisal Institute intends to position appraisers to analyze data more efficiently and to report the analysis in a format that is more readable and consistent with mortgage industry information standards.
The Appraisal Institute originally issued its Residential Green and Energy Efficient Addendum in September 2011 as an optional addendum to commonly used appraisal forms for loans sold and guaranteed by government-sponsored enterprises and government agencies. The Addendum was most recently updated in March 2013.
“The objective of this Addendum is to standardize the communication of the high performance features of residential properties,” said Appraisal Institute President Jim Amorin, MAI, SRA, AI-GRS. “The Appraisal Institute encourages builders, contractors, homeowners and third-party verifiers to complete the Addendum and present it to appraisers, real estate agents and lenders.”
The Addendum has been reorganized and updated to ease readability and to address continued industry developments in the valuation of green and energy efficiency, including solar systems. It also helps appraisers meet appraisal standards requirements for identifying property characteristics that are relevant to that property type and value.
Also, the Addendum can now be delivered in a digital form using a dataset specification that is based on the Mortgage Industry Standards Maintenance Organization (commonly known as MISMO) Reference Model v3.5, which enables it to be delivered and read electronically by end-user systems, including those used by mortgage lenders analyzing collateral risk.
“The Addendum can be attached to the MLS listing to provide sufficient detail on sales and listings to assist buyers, appraisers and real estate agents in understanding the high-performance features of the property,” Amorin said. “It also can be shared with the lender at the time of the loan application to assist them in understanding the property type. The lender may engage an appraiser with sufficient knowledge of the property type to provide an appraisal to meet secondary mortgage market guidelines.”
Other advancements in the latest version of the Addendum:
· The accompanying materials include a field-by-field reference guide featuring definitions to all 140 fields found in the Addendum.
o Users of the Addendum will now have a full reference for each field. This will help improve the application, readability and understanding of the Addendum and reduce interpretation variances within the industry.
· The reference guide and data specification sheet will help appraisal software information technology companies to write scripts to auto-populate information from data systems used by appraisers (multiple listing services) to appraisal software programs, which can then be interpreted by end users and mortgage lenders.
· Parties utilizing the Addendum, including those providing information to appraisers can now utilize relevant components of the form.
For its efforts in updating the Addendum, the Appraisal Institute was recognized May 15 at the Better Buildings Summit 2017, as part of the U.S. Department of Energy Home Energy Information Accelerator in Washington, D.C.
Learn more about the Appraisal Institute’s industry leadership in green valuation.
Download the Appraisal Institute’s seven-page Addendum.
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The Appraisal Institute is a global professional association of real estate appraisers, with nearly 19,000 professionals in almost 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. Individuals of the Appraisal Institute benefit from an array of professional education and advocacy programs, and may hold the prestigious MAI, SRPA, SRA, AI-GRS and AI-RRS designations. Learn more at www.appraisalinstitute.org.