The Appraisal Institute's Commercial Green and Energy Efficient Addendum offers a communication tool that lenders can use as part of the scope of work. The addendum also assists investors in communicating the construction features of the property that impact income. Appraisers, builders, energy modelers, green certifiers, architects and investors should use the addendum even if a property is not certified green by a formal certifying organization but does possess green features. The water and energy efficient features are key to a higher net income and appraisers should take care to identify these features.
"The market has many different ideas of what makes a property green, and this addendum will assist in understanding actual green features," said Appraisal Institute President M. Lance Coyle, MAI, SRA. "After the construction of a building, the construction features are often forgotten and the blueprints and specifications are often misplaced or overlooked."
The addendum can be completed in its entirety, or qualified individuals can use only the pages that apply. Appraisers are required to have sufficient knowledge of these features to review the addendum completed by others and deem it credible to meet Uniform Standards of Professional Appraisal Practice standards for work relied upon by others.
The Appraisal Institute long has been the leader in green valuation. In addition to its Commercial Green and Energy Efficient Addendum, the Appraisal Institute has demonstrated its leadership in green and energy efficient valuation in many other ways.
- Since June 2008, the Appraisal Institute has offered nearly 450 individual education programs on green and energy efficient valuation, and more than 6,200 attendees have participated.
- Two Appraisal Institute members contributed to a landmark study released in January 2015 by the U.S. Department of Energy's Lawrence Berkeley National Laboratory that found that home buyers consistently have been willing to pay more for homes with host-owned solar photovoltaic energy systems. The eight-state, 12-year study produced the most authoritative estimates to date of price premiums for U.S. homes with PV systems.
- At the request of appraisers' clients, in April 2014 the Appraisal Institute expanded its Valuation of Sustainable Buildings Professional Development Program's online registries of residential and commercial appraisers to include everyone who has completed the course.
- The Appraisal Institute released a new book, "Residential Green Valuation Tools" by Sandra K. Adomatis, SRA, in April 2014. AI previously published "An Introduction to Green Homes" by Alan Simmons, SRPA, in 2010.
- The Appraisal Institute and the Institute for Market Transformation issued guidance in January 2014 on valuing green and energy efficient buildings.
- In October 2013, the Appraisal Institute partnered with the Colorado Energy Office to provide an analysis of the impact of solar PV systems on the home-buying process. The study sought to better understand the impact, if any, that solar PV has on the sales transaction process.
- In March 2013, the Appraisal Institute released an update to 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 profession's most widely used form for mortgage lending purposes that allows appraisers to identify and describe a home's green features, from solar panels to energy-saving appliances.
- In February 2013, the Appraisal Institute added a new solar course to its Valuation of Sustainable Buildings Professional Development Program, which educates appraisers on the intricacies of valuing high-performance residential and commercial buildings, and consists of four courses: "Introduction to Green Buildings: Principles & Concepts;" "Case Studies in Appraising Residential Green Buildings;" "Case Studies in Appraising Commercial Green Buildings;" and "Residential and Commercial Value of Solar."
- 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.
- 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.
- 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.
Download the Appraisal Institute's 10-page Commercial Green and Energy Efficient Addendum.
The Appraisal Institute is a global professional association of real estate appraisers, with nearly 21,000 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.
SOURCE Appraisal Institute