Adding Value to Contractors’ Work in the Mortgage Market


Home Performance Coalition, with the Appraisal Institute, is working to increase demand for residential energy efficiency by ensuring that the improvements people make to their homes – largely completed by contractors – are accurately reflected in the value of the home.


If energy efficiency upgrades are accurately valued at the time of sale, in the same way that homes are enhanced by more visible amenities such as granite countertops, homeowners will be much more likely to invest in those improvements, increasing the profitability of the home performance industry. This strategy requires the energy efficiency industry to provide real estate agents and appraisers with high-quality information about a home’s energy efficiency features at the time of listing, and it requires education of all sectors involved in real estate sales. (The City of Portland recently approved a policy to have every home sold in Portland receive a Home Energy Score, or equivalent, at the time of listing).


The Appraisal Institute recently released A Guide to the Residential Green and Energy Efficient Addendum that provides appraisers, real estate agents, energy and green raters, lenders, builders, the secondary mortgage market, and green/energy organizations with an explanation on how each section of Residential Green and Energy Efficient Addendum applies to the valuation and marketing of the property.


For existing homeowners, the Residential Green and Energy Efficient Addendum provides a “brag sheet” or description of hidden features that are often overlooked by real estate professionals when documentation like the Addendum is not available. Many new construction specifications do not communicate high performance features in a meaningful way to appraisers, real estate agents, or the lending world. Completing the Addendum on existing, proposed, or new construction structures and giving it to all parties involved in the transaction, including attaching it to the MLS to enhance marketing, is important. If this data is readily available to all parties, it would result in a smoother transaction, better marketing, and a more credible appraised value. At the time of the mortgage loan application, the borrower should give the loan officer the completed Addendum to notify the lender that an appraiser with “knowledge and/or competency” of how to value energy efficiency features is necessary.


The Residential Green and Energy Efficient Addendum has been gaining market share as a tool to communicate the high performance features of a home over the last several years. Home Performance Coalition provided input into the Addendum and is currently mapping HPXML to the fields in the Addendum to facilitate the automatic transfer of information supplied in a BPI-2101 compliant certificate to appraisers.


In coordination with the Appraisal Institute, HPC also published a three-page brochure, Appraised Value and Energy Efficiency: Getting it Right, for contractors on how to speak to homeowners about the benefits of documenting the energy efficiency improvements they make to a home.


Written by Julie Caracino, Director of Research & Standards 

Views: 84

Tags: appraisal, energy, estate, home, homeowners, mortgage, real, score


You need to be a member of Home Energy Pros Forum to add comments!

Join Home Energy Pros Forum

Forum Discussions

Indoor Air Quality Monitors and Meters

Started by Rob Madden in General Forum. Last reply by Al Tibbs 13 hours ago. 13 Replies

70 unit building rehab

Started by Jerry Needham in Multifamily. Last reply by Sean Lintow Sr on Saturday. 2 Replies

Linda Wigington Leadership Award Nominations

Started by Diane Chojnowski in General Forum. Last reply by Diane Chojnowski on Friday. 1 Reply

Latest Activity

Laurie DiDonato posted an event

RESNET HERS Rater Hybrid Training (Classroom Section in NH) at Online/ Classroom Component in Manchester, NH

April 29, 2019 at 9am to May 24, 2019 at 5pm
Online Component: NEW- On-Demand Training Modules (with Live Office Hours) Office Hours: April…See More
8 hours ago
Emily Ambrose posted a blog post

City Pages: What They Are & How to Use Them Right

Recently, we have been talking a lot about…See More
12 hours ago
Al Tibbs replied to Rob Madden's discussion Indoor Air Quality Monitors and Meters
"I would take a look at Gray Wolf products. They are the best I have used. I have tried most over…"
13 hours ago
Tommie John added a discussion to the group Energy Auditing Equipment for Sale, Trade or to Purchase

Blower Door and Duct Blaster!

Hey everyone, I have some great items for sale a Minneapolis blower door with dg-700. I also have a…See More
13 hours ago
Tommie John joined allen p tanner's group

Energy Auditing Equipment for Sale, Trade or to Purchase

Discuss the pros and cons of the equipment you are interested in prior to purchase. Post equipment…See More
13 hours ago
Kelly Caplenas posted a blog post

Technology and Customer Service

I read this line in a Forbes article … "Time and technology wait for no one, and customer loyalty…See More
14 hours ago
Diane Chojnowski posted a discussion

EERE Request for Information Concerning Efficient & Flexible Building Loads

The DOE Building Technologies Office has issued a Request for Information to solicit feedback from…See More
14 hours ago

© 2019   Created by Home Performance Coalition (HPC)   Powered by

Badges  |  Report an Issue  |  Terms of Service