The idea of putting green features into a home sounds great, but, like other investments, home owners want to know they're getting at least some of their investment back when they resale, and home buyers want to know exactly what they're getting and paying for.
Both continue to be tricky issues when it comes to marketing a "green" home and placing a value on it, particularly at a time when the nearest comparable sale may be a foreclosure or bank owned home down the street.
"Greenwashing" has landed in the housing market, and it's proving to be a irritant that requires housing market professionals to become sleuths, as evidenced by complaints from real estate agents and builders from throughout the country who attended Greenbuild, a national conference on sustainable building practices held last month in Chicago.
Here's just one inkling of the fact versus fiction: Real estate agents have seen evidence of firms offering fake Energy Star plaques that people can affix to the outside of their homes, said Al Medina, a Chicago real estate agent and director of the National Association of Realtors' green designation.
The National Association of Realtors likes the idea of highlighting a home's environmentally friendly features in its listing but wants to ensure everything's on the up and up and the would be home buyers are not being misled about what the home for sale really has going for it.
In a national survey, 240 of 629 multiple listing services said they have implemented or are in the process of inserting some green fields into their listing forms. But making sure those fields are filled out accurately is largely a matter of self-policing.
More than 70 percent of the listings in the Arizona Regional Multiple Listing Service Inc., for instance, have at least one green field checked, but what does green mean? "A ceiling fan qualifies as a green feature, and in Arizona there isn't a home that doesn't have a fan," said Chief Executive Bob Bemis. A ceiling fan as a "green" feature seems to be quite rediculous as this really doesn't address how the home has been built green.
Why are some in the field pushing for green listings? Because they pay off. In Portland, Oregon, the price premium for a certified green home was 18 percent in 2009-2010. In Atlanta, certified green homes this year are selling 14 days faster than conventional homes. Truly "Green Built" homes have a perceived value in the mind of the buyer, but placing valuing on these homes for sale at appraisal continues to be an issue as well.
While the number of appraisers trained in placing a monetary value on green improvements continues to grow, experts say it falls on homeowners and local real estate agents to ensure they've got the right appraiser for the job. The key is to be an active participant in the appraisal process from the get-go, rather than fight the results after the fact, when the value has already been determined in writing.
Homeowners are recommended to keep a running file at their home, defining every project undertaken to make the home more green. When it comes time to have a property appraised, homeowners should ask the appraiser if he or she has green training. If not, request a different appraiser.
Then show the appraiser all the documentation on the home and its environmental attributes, including its home energy rating and inspection documentation. For new construction, include the building plans, specifications and the cost breakdown between a house built to standard code and a house built to certified green specifications, said Sandra Adomatis, a Punta Gorda, Fla.-based appraiser.
"We can't (just) say it's a better-built home," Adomatis said. "The lender says 'Why?' You can argue with the appraiser all day long, but you can't argue with the facts."
Sarah Coulter, head of @Properties' green division, said she finds herself talking up green features of a home to appraisers, with the documentation to prove her words, and most of the time they welcome her assistance. But it doesn't always translate into immediate dollars and cents.
"I think it is increasing value but not by a specific calculation," Coulter said. "It's adding to the marketability. More and more consumers are interested in hearing more about what features are in the home to get them on that (green) path."
It just seems that desparate home sellers are taking advantage of this to increase the value of their home in a declining housing market.
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