Green Upgrades = Increased Home Value?
October 29, 2008
Do green upgrades translate to increased home value? The answer is sometimes. It seems so obvious that improvements to your home that will increase energy efficiency (lower operating costs) or that use more healthful products (non-VOC, non-formaldehyde) would translate to a higher property value. From the perspectives of the traditional lender, appraisor and realtor, this isn’t the case.
I first became aware of this while chatting with a real estate appraiser friend of mine. I asked her how much value is placed on a home labeled as “Energy Star”. Energy Star for Homes, one of a growing number of building certification programs, sets readily achievable benchmarks for sustainability. This is primarily based on insulation and mechanical systems efficiency. The program has become a solid baseline for quality construction and one that clearly benefits homeowners in terms of comfort and cost. My appraiser friend had never heard of Energy Star for Homes.
Since that conversation with my friend, I’ve learned that there are appraisers who are knowledgeable in green construction and use this knowledge in their appraisals. Scott Hardin, of The Appraisal Guy based in Redding, Mass, is well-versed in construction technology and is considered a ‘green’ appraiser. In some states, there is a certification for green appraisers – Scott is hoping to be the first in New England.
On the lending side, there are lenders who offer ‘green loans’ for a certified new home or for energy upgrades to an existing home. The value of these loans is based on not only the increased anticipated value of the home, but also the borrower’s ability to pay more for the loan due to their lower utility costs. Makes sense! These forward-thinking lending options require that assessors are aware of added value in these ‘green’ improvements. For information on these loans, Jeff Cole at www.myenergyloan.com is a great resoures. Wells Fargo and other lenders are also creating green loan programs.
Similar smart moves are happening on the realty side. Savvy and conscious realtors are learning about green construction and its value in the tight market. Paulette Zuena at Remax in Andover, Mass. (www.YourPaulette.com) has become a great community resource on green building. Another realtor, Boston Green Realty (www.bostongreenrealty.com) located in Boston and Haverhill, specializes in green listings and in outlining their benefits to potential buyers. In addition, Boston Green Realty will work with buyers or sellers to add planned energy improvements into the purchase price of the home, and with the lenders to verify the added value of those improvements.
It’s exciting to see that financing and real estate are catching up with the value of green construction, making it more feasible to improve our homes one house, or one loan, at a time.
For more information on making green improvements to your home or in planning a new green project, contact Juli at GreenBridge Architects.