Zero to 60 - Scores of Green Appraisers Hit the Streets Overnight in Colorado

Home builder Sean Smith feels like Sisyphus – the Greek mythological figure doomed for eternity to push boulders uphill only for them to crash downhill when he neared the top.  Smith’s boulder?  Higher appraisal prices for the green homes he builds in metro Denver.


“We built a house a couple of years ago, and the bank didn’t want to value the solar panels and insulation improvements.  We went through the bank that was doing the construction loan and had them deal with the appraiser,” he said, noting that with construction loans, it’s particularly hard to get green homes valued.  “The bank took our word for it [that the panels added value to the home].  They went to the appraiser and passed on the information we had.”


Smith is an anomaly, one of a handful of builders and Realtors who know how to get the “green premium” – the price bump for green homes and features – recognized in an appraisal.  But navigating this isn’t easy, and there are lots of moving parts that must synch. 


That process got easier in May.


Last month, the Colorado Energy Office subsidized classes in green residential appraisal – two days’ worth of training taught by Florida appraiser and former vice-chair of the National Education Committee for the Appraisal Institute, Sandy Adomatis.  The classes, capped at 60 each day, were full.  And while neither Peter Rusin, the Residential Program Associate of the CEO, nor Adomatis will discuss the exam pass rates for either class, literally scores of appraisers competent to value green homes and buildings hit the streets in Colorado’s real estate market overnight.  Before Adomatis’s class, Colorado had precisely none – zero appraisers with the required 14 hours of training and testing to appraise green homes and features.


The pieces are coming together quickly in Colorado, at least.  In 2010, the CEO developed the “green-field addendum” (GFA)  – a green-feature data capture for listings on all Colorado’s 18 multiple listing services.  Rusin says that today, 97 percent of the MLSs statewide have this.  And the Colorado Real Estate Commission, the regulatory body for real estate sales, this year grafted the GFA into the state residential real estate contract


Last summer, Rusin and the CEO signed a memorandum with the Colorado Coalition of Appraisers and the Appraisal Institute to fill the void in the appraisal community.  Rusin has also been conducting market studies on green-home and feature sales throughout the state, including a soon-to-be-released one on solar electric valuation.


IMAGES - Home builder Sean Smith (above).  Appraiser Sandy Adomatis (left).

In the meanwhile, Adomatis says anyone seeking to have energy adjustments and green homes valued must pound the table with lenders and insist on appraisers who are trained and tested in these “complex” properties.  One example often cited is horse properties – for example, a Realtor or builder who sells condos downtown probably has no ability to properly value something this specialized.


‘Same with green.  “Competency in green valuation starts with green valuation education, and it takes more than a one-hour webinar on green to become competent,” says Adomatis.  And if lenders don’t send appraisers with the requisite training, it’s completely legit to ask for a reload, she says.


She also recommends that anyone with knowledge of energy-efficiency and/or properties fill out not only the GFA for the MLS (real estate transaction), but also the five-pager targeted at the appraisers (from the Appraisal Institute).  Hand it to ‘em, she says, and the appraiser can use it, verify it, replicate it, or whatever. 


Smith looks forward to the day when this is easy.  “I don’t think I’ll have to keep fighting.  If we can get an understanding of why these tighter homes are worth more, that becomes the standard and not the exception,” he says.


“If homes that didn’t have a HERS score are more negatively hit versus we who are doing [green] improvements seeing zero benefit, that’d be pretty awesome.”

# # #

GreenSpot is an industry leader in helping our clients realize added values for green, energy-efficient homes and buildings.  Contact us today if we can help you.

-          CLICK HERE to find a green appraiser.  Those listed are Designated Members of the Appraisal Institute.

-          CLICK HERE for Fannie Mae guidelines and requirements that appraisers have the necessary competence to appraise in a category.

-          CLICK HERE for Sandy Adomatis’ excellent blog on filling out the appraisers’ green-field addendum (GFA).

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Comment by tedkidd on July 20, 2013 at 4:19pm


Not having the monthly to disaggregate is a drag, but if you can get 2 year consumption that's way ahead of us! It's like going from NOT crawling to walking with a cane.  You are at least going someplace!  

You can get a ROUGH idea of opportunity from there by putting the house on the homescale

Comment by Melissa Baldridge on July 20, 2013 at 3:13pm

I put out an APB for HERS raters and green-building professionals who have access to rated homes AND utility bill usage (for a year or two) to reach out to Sandy Adomatis.  She's doing a study pairing the two to see how high-performance homes ... perform.  Do they or not? 


'Thought I mentioned that here, but maybe not.  Anyway, if anyone out there has info like this, it will help her, and us all. 



Comment by Kevin Dickson on July 20, 2013 at 11:35am


Yes I think the EPS is calculated from the HERS score.  So all we need is a standard algorithm to convert.

I want to also mention that finding actual usage is not as easy as it used to be. Xcel in Colorado will tell a third party you the total gas and elec. usage for the last two years and that's it.  So there's no way to estimate DHW usage. You might be able to tell if the occupants are growing marijuana or overcooling the house in the summer.  But you can't tell which unless they break it down by month, which they won't.

Comment by tedkidd on July 19, 2013 at 6:12pm


Sounds like Melissa is well into proof of concept in her market.  But that EPS thing is pretty cool.  Is it a calculator, something you can adjust assumptions or create for yourself?  

If there IS a calculator (it would be cool), right off the bat couple things I'd like to see - Actual use so you can see deviation from estimated, an entry for Energy Price so it can convert units to cost, and cost per square foot.  

Seeing deviation is reassuring.  "Oh yeah, that guy had a hot tub" is better than "I can't figure out why this doesn't line up, what a waste of time."  I think being able to easily adjust inputs is important or your score becomes outdated with every energy fluctuation.  And some simplicity, as you suggest - cost per square foot is a metric Realtors are very comfortable with.  

I got so frustrated that there was no simple "Opportunity Calculator" I created this simple one:

Comment by Melissa Baldridge on July 19, 2013 at 5:51pm

Kevin, I agree that the HERS isn't simple and that some raters can't explain its value to a homeowner.  And absolutely - the process of getting better (green, energy-efficient) properties to sell and appraise up isn't an easy one. 


We're doing it, though.  Routinely.  AND we need the HERS to support higher sales and appraisal prices because that's what it was designed to do - capitalize an energy savings stream.  And energy generation if you toss in renewables.  It does this because it's hard-coded into Fannie and Freddie, and appraisers need that.


Again, it's not an easy process, and there are many parts, which have to snap together.  But when that process is done right and shepherded carefully, it can bring higher values in the marketplace.  The goal?  Make this easier for everyone (including us!)   In the interim, we're having success now.

Comment by Kevin Dickson on July 19, 2013 at 1:27am


A home rating needs to be simple.  The simplest rating is just like an EPA appliance rating: the annual energy cost.

A HERS score doesn't cut it.  Think about the last time you tried to explain a HERS score to a fellow realtor.  It takes 5-10 minutes just to explain it.  Two homes can have the same HERS score, but one will cost twice as much to heat. Why? Because it's twice as big. The HERS score hasn't given the consumer the only thing he really understands - Dollars per year (or per month)

At least one home rating system reports the estimated annual energy cost, the Energy Performance Score

Putting the EPS yearly cost on an appraisal and on the listing will be much easier and more useful than filling out the GFA.

The market will gradually start understanding how the EPS should be reflected in the selling price once appraisers start using it for a standard adjustment on the appraisal. Just like "2 car garage +$4,000"

Comment by tedkidd on July 10, 2013 at 9:53am

In NC, we are getting killed by appraisers under valuing earthberm and walkout basement situations. 

Hey Brian, not sure I understand under-valuing.  Under-valuing according to whom?  As a seller, isn't your perspective usually going to lean toward the assertion that the market undervalues your asset?  Are you willing to accept that as a member of the human race, along with the rest of us you too are subject to this bias? 

The more one learns about building science, the more dubiously one looks at basements with "living space" in them.  Basement "Living Space" can often be as much liability as asset, particularly in hot/humid/wet climates.  These spaces are often finished without knowledge or regard to health, safety, or durability issues associated with having finished spaces underground.  Even well designed and operated these spaces are likely to have ongoing energy penalty from dew point management, and this is before considering the radon herring...

So the value you are seeing may in actuality be quite reasonable as appraisers deduct value for these longer term high cost risks.  

Comment by Melissa Baldridge on July 10, 2013 at 9:32am

Hi Brian,

Yeah, basements aren't really covered in the green-field addendum.  Maybe try loading them up with energy-efficient systems and features.  ;) 


I say that half-jokingly, and half not.  I know appraisers value below-grade space as less than above-grade - here in Colorado we build basements, and it's an issue.  I tell our investors and clients ALL THE TIME - if they're gonna remodel or build out a basement, it's the perfect time to (1) add green features, (2) quantify those with a HERS rating, and (3) even certify that.  (The National Green Building Standard is one of the searchable green labels on Colorado MLSs, and they do less-invasive remodel and partial-home certifications.)  That way when they SELL the home, they'll be able to snap the pieces together to recoup some of the investment. 


But perhaps the best part?  That basement will be comfortable.  'Know the EE people get that as it's a top selling point for improvements, but I teach Realtors that routinely.  They tend to be transaction-focused rather than concerned about how a homeowner is going to EXPERIENCE that property between buying and selling.

Comment by Brian Knight on July 9, 2013 at 7:55pm

Forgive me for not looking myself but is there anything in the GFA or other papers that address the issue of below grade living space? In NC, we are getting killed by appraisers under valuing earthberm and walkout basement situations. 

Comment by Jan Green on July 8, 2013 at 11:41pm

Thanks Melissa!  Will do.  Exciting stuff.  Sandy sent me a message earlier hoping to be in Arizona after Georgia.  Need to get the utilities to sponsor it.  Fingers crossed!  Great job with your blog!

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