They Might Be…Now
Home improvements, when done right, can add value to a home during resale or appraisals.
One improvement that has been falling by the wayside, however, is energy efficiency.
There have been many posts on Active Rain that have got me thinking, not just about going green in my diet, but also about homeowners who go green in their homes, only to be disappointed by lower-than-expected appraisals when they’re selling or applying for loans.
In an article published by Inman.com, “Industry push to raise visibility of home energy efficiency improvements,” Ken Harney discussed the launch of a new campaign, “Blueprint to make Energy Efficiency Improvements Visible in the Real Estate Market,” by two research and advocacy groups, the National Home Performance Council and CNT Energy.
In truth, few listing services have “green fields” so that homeowners looking to invest in energy efficient homes, can’t shop for them effectively. The campaign seeks to remedy this by offering MLSs a prepackaged approach enabling them to integrate green fields more easily into their systems.
In addition, appraisers with no training in valuing green improvements either ignore them or only give homeowners minimal upward adjustments. The campaign, in response, seeks to expand the Appraisal Institute’s Resident Green and Energy Efficient Addendum, to better appraise homes with high-performance features as well as providing a methodology that calculates the market value of homes with these improvements.
I think the campaign’s initiative is a good and necessary one. Home improvements’ are done to potentially increase a home’s value, not deter or decrease its value. The problem, I think, is that “going green” is still a relatively new thing, especially when it comes to home. Everyone knows about recycling, but “green” home improvements continue to be rare and undervalued.
If this continues, homeowners might be weary of green home improvements in the future. Why should they invest their money in something that will give them little to no profit? It’s like building a pool in a home you only bought to resell, it’s just not profitable.
The value of this campaign, however, can help everyone who wishes to go green. In fact, a 2012 National Association of Realtors’ survey found that 87% of buyers said a home’s heating and cooling costs were ” very important.” In the same survey, 70% of buyers said energy efficient lighting and appliances were “very important” to them.
The market for energy efficient homes is there, and this campaign is just one of the many steps that need to be taken in order for energy efficient home improvements to get their day in the sun.
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