Apr
21

Appraisers Need Help on Earth Day and Every Day

April 21, 2011

Friday is Earth Day. In honor of the occasion, one Chicago-based group is calling on the real estate community to step it up.

The Appraisal Institute, the nation’s largest professional association of real estate appraisers, wants to ensure reliable valuations for sustainable “green” buildings but needs help to make that happen.

“The Appraisal Institute is the world’s leading authority on green valuation, but producing reliable property valuations requires a collaborative effort,” said Appraisal Institute President Joseph C. Magdziarz, MAI, SRA. “Data is vital for appraisers to do their jobs, and we often need cooperation from others involved in real estate transactions to get it.

“Earth Day is the perfect reminder for us all to work together. When we do, everyone will benefit, including homeowners and buyers.”

logoMagdziarz said appraisers need to have all the information from underwriters, builders, real estate agents and home inspectors related to energy-efficient features so they can make appropriate, market-based adjustments.

And, while appraisers often request ratings information, blueprints and specifications of properties’ conservation features, they aren’t always provided the information – either because those involved in their construction, sale or financing mistakenly think they are not applicable to the appraisal process or because the information is not available.

Magdziarz says that one of the main misconceptions among non-appraisers about green valuation is that cost does not always equal value.

“It’s not yet clear how well the market recognizes the actual or perceived benefits of a green building,” Magdziarz said. “Do potential buyers view green features as enhancements to a property’s market value or as over-enhancements? The answer likely depends on the particular property and the local real estate market.

“If appraisers have access to the data they need, they can produce more reliable opinions of value. Then builders and consumers would begin to see the return on investment, and the demand for new green construction could increase.

“This will drive the market toward a more sustainable building process, which holds immeasurable environmental benefits for all involved. This Earth Day, that’s worth celebrating.”

To learn more about the Appraisal Institute, visit appraisalinstitute.org.

About The Author

Tracey

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1 Comments

1

This is an excellent article Tracey. Thank you for sharing it. We will see how appraisers handle this new challenge.
Brian Hayes
chicago-home-loans

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