Valuation of Residential Green Buildings
Valuation of green residential buildings can be problematic for appraisers. In analyzing and valuing green buildings, the appraiser may have difficulty in obtaining pertinent data, comparable sales and confirmation of how the building performs (especially for new construction). Credible appraisals depend substantially on data that may or may not be readily available in the market.
In the appraisal process, appraisers first gather general market data, then collect data specific to the property being appraised and its competing properties before performing a highest and best use (HBU) analysis on the subject property. The next step is applying the approaches to value to the subject property based on their findings earlier in the process. The final step is reporting the appraiser’s opinions and conclusions so that intended users can understand them.
This course is designed to follow the appraisal process as outlined above. Our exploration of market data will begin broadly, then narrow as it moves to highest and best use before continuing into the cost approach and sales comparison approaches to value.
Many real estate appraisers have not yet been concerned with the need to learn and understand green building issues. But as energy efficiency and sustainability are increasingly valued by consumers, incentivized by governments and marketed by builders and real estate professionals, appraisers will need to take a building's "green-ness" into account in order to accurately reflect the actions of buyers and sellers in the market. In the future more buildings will be green buildings, and all appraisals will take that into account.
Completion of this course can be the first step toward earning a certification in valuation of residential green buildings. This certification path is designed to grow your knowledge of green building, provide you information on methods and techniques, and most importantly, enable you to competently complete an appraisal assignment on a green home.