Every once is a while I get to appraise some type of energy efficient home with built in solar panels, wind turbines, light bulbs, furnaces, and home construction. Most of the time, these types of items will bring you nothing in extra value to your home in the Northwest. Do you know why? There is a disconnect from the Realtor databases and a lack of data in the MLS databases, and a sheer lack of similar sales for these "green" items.
I understand that the market will consider these types of improvements positive. With my professional appraisal experience and after speaking to several Realtors that have listed or sold these types of properties, it is clear that is could take the home owner 8 to 20 years to get their money back out in the terms of energy savings.
In terms of home value, your home will be appraised like any other home. If the real estate appraiser can not prove that the market is willing to pay for these types of homes, the value will not increase, nor decrease. In these cases, green homes are trumped by the next best thing in the market, similar homes.
Here is one of the few ways I see green homes increasing in value. There must be an entire development that is significant is size that makes up an entire community of green homes. Let's say a developer put together a development that only offers green homes. One part of the land is used for both RV storage, but on top of each building there are solar panels. Around the entire perimeter of the 10 acres development, there were wind turbines. On the roofs of every home in the development, there will be more solar panels. All homes in the development are made from green products and energy efficient items. Do you get the idea? With a big enough development, hopefully, there will be at least one or two sales to support the value.
The cost of the initial development for this type of development may be 30% more than the cost of a regular built home. If the market is willing to buy into a development like this, they will pay more for homes like this. There benefits will be energy reduction, environmental reasons, and money savings. The negatives may be ugly wind turbines around the property and acceptance of solar panels located on everyone's home and the cost to maintain something like this.
But when it came time to appraise homes like this, there will developments that support this type of technology. There will be comparable sales to select and compare to the subject and an appraiser can clearly conclude what the market is will to pay for homes in this type of development and outside the development. In other words, the appraiser can prove it. That's how to make green homes increase in value.
Would you like to learn more about buying, selling, and refinancing a home from a real estate appraiser
