Green Features Provide Added Value on Appraisal!
Such exciting news! I recently wrote a blog for the Contest re “Be The Star of Your Own Movie, With a Twist “. My blog lists duties I performed while the agent was out of the country. One such “duty”, and the most important one, included completing some due diligence of a listing currently under contract. The home listed for sale is under contract for $1.2 million. According to the listing agent, comparable sales set the value of this home at $1.16 million. With an appraisal date set, I was on a deadline to work to bring the appraisal price up the purchase price. Green Features Provide Added Value on an Appraisal!
Upon reviewing this listing, I noticed in the remarks section that the average monthly utility bills are $250. That doesn’t sound unreasonable, but wait for it…… The home is over 6,000 sq ft!!! Alarm bells are going off in my head. Reviewing the rest of the listing, I don’t see any features listed that would assist in the energy savings or efficiency of this home that was built in 2008.
Contacting the listing agent, we meet with the owner of the home who has been elusive in providing details about the home to the listing agent. I asked to see the home and meet the owner. I then ask if I can speak with the builder and ask about energy efficient features. Low and behold, the builder lists the features I suspect are hidden in the walls. Features that an appraiser cannot see that exist by walking through the home. BINGO!!! They are:
Garage doors, insulated
Smart Home System (Control 4) for interior, & exterior(3 boards & remote/cell) & front gate security entrance (remote video intercom wire) $3000
Upgraded blue Dow ® sheathing for extra efficiency - $3,000
Spray Foam Icynene® insulation - Full Exterior and “lid” of roof (5 ½” thick around entire home and lid) Cost per builder $28,000
Milgard Highest level low e windows (2008) & exterior doors (steel insulated atrium doors) $8000.00
Fresh Air Mechanical Ventilation Systems (2) $7000
2 upgraded Water Heaters – 90 AFUE high efficiency - $3000
6 ensuite bedrooms with individual thermostat/temperature control –zoned for each bedroom, mechanical dampers - $6000
Knowing we are nearing the time of the appraisal, and with the agent out of the country, I create a list of the features, itemizing them by what the owner paid to have them installed. This list is then provided to the appraiser at the home prior to the appraisal being performed, along with more supporting documents.
Coincidentally, this appraiser co-authored the Green & Energy Efficient Addendum, which is the attachment to an Appraisal. The Addendum is used to document the features and hopefully provide added value. It also can be handed down to the next owner if the appraisal is shared.
As of today, I’ve learned that my efforts were rewarded with an appraisal coming in at contract price! Understanding that this was critically important to all parties concerned, The owner of this home doesn’t have to drop his sales price; the new owner just learned of even more value in the home they are purchasing; and the listing agent now understands more about green features. This is a win win for all parties!
If you are selling a home with lower than average utiity bills, please call me to sell your home. My methods of working with an appraiser, bridging the gap in value, will work toward gaining you as much value as possible, making you more money.
Uncovering these features just saved this seller $40,000, the buyer learned he has even more features that will provide energy savings now and in the future, and the listing agent is a hero to her client. Call me, your “Value Added” real estate professional and your efforts will be rewarded ten-fold!