Green is Tough to Appraise! So much emphasis has been put on appraising homes lately. We all know that appraisals can sometimes be for less than the sale price. So, it stands to reason that the same thing would occur in homes that have green features and don't appraise. Appraisals are the biggest hurdle with homes that have solar panels, tankless water heaters, gray water systems, spray foam insulation, and other green features. Homeowners add these features to reduce their energy bills, for health reasons, to reduce their carbon footprint, or just because it makes good sense. But when it comes time to sell these homes, appraisals don't give enough value for these features.
There are areas around the country that provide more or less value for these homes. The National Association of Realtors and other institutions say that on average, homes with green features sell on average for 11% more than homes without them. That said, are you seeing green homes in your area sell for more?
Recently I visited a home that was purchased as a foreclosure for $46,000, entirely remodeled and relisted for sale at $159,900. This home was under contract in less than a week and I've been told that the sales price is close to list price. The developer and the real estate company opened the home for a public tour. Check out these before and after pics!
This 3 bedroom, 1 bath home is block construction and located in a Central Phoenix neighborhood 
at 1246 sq ft with a carport. I can only imagine what the utility bills were like in this one! Grassy front yard and evergreens out front with a porch you can barely see. It is north/south and the front faces south. Obviously, this is enhanced photography, but you can clearly see that the shrubs have been changed, tree added, new paint, new roof, and new windows for efficiency. If I were remodeling, the grass would have been replaced with Xeriscape, desert landscaping to reduce water consumption.
But wait till you see the interior! This original kitchen was typical in its day, but clearly this is not a 1955 stove or refrigerator.
So previous owners had made upgrades here and there, but nothing near the current remodel. 
The new kitchen has Energy Star Appliances, which use less energy. The kitchen area feels larger due to the built in bench area that provides seating against the wall for the eat in kitchen. 
The upper cabinets were removed which, creates a larger more open feel in the kitchen.
The entire home has stained concrete floors with a glossy finish, new baseboards provide a crisp finish, and just the right paint color creates a soothing feel from the minute you walk in the door.
The bathroom has a sleek finish with a narrow sink, providing more room to a small bathroom. The tub/shower was switched to tile up to the ceiling. 
The new heat pump was moved to the roof most likely to allow for even temps throughout the home and I'm sure duct work had to be considered as well.
The home achieved NAHB Emerald status, which is the top category for a green remodel with the National Association of Home Builders. This is not the first merry- go-round for this developer and I look forward to seeing more of his remodels.
What a treat to see this transformation!
I believe it's up to us to spread the word and create public awareness of the benefits of updating homes to a more energy conscious level. We can be the catalyst for these transformations by encouraging this during the purchase process. Buyers can use Energy Efficient Mortgages (EEM's) to add green features to homes.
The 203K product is an excellent example of this type of program. Buyers can choose a foreclosure that doesn't have kitchen cabinets, appliances, or air conditioners and transform these homes into something like this. The upgrades in this home would exceed available funds in a 203K, but the same effect could be achieved and have a similar look.
I'm not the listing agent on this property, nor did I assist in the purchase. But I am the Builder Commitee Chair for Maricopa County for the Residential Green Building Committee, United States Green Building Council (USGBC) AZ Chapter. One of my missions is to expand awareness of green homes to the public.
It's a "win win" for the buyers, the real estate market and the environment.
To learn more about your local chapter, visit USGBC and volunteer!
I'm going to follow this home to see the actual sales price and repost again. I'm very curious how this home will appraise!
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