The Value of a Green Appraisal: Making the Most of  Your Green Home

When buying, selling or appraising a home with green features, three key factors determine whether or not value will be added to the transaction as a result of those characteristics.

To fully realize higher sale price, buyer interest or appraised value on a green home, it is important to ensure that:

  • Available green feature data, including builder or homeowner purchase costs, is properly listed and accounted for.
  • Knowledgeable appraisers and real estate agents are involved.
  • Comparable data is available to evaluate the greater market value of homes with green features to those without.

How can you ensure that your green home is valued higher than others?

Let’s start with an example:

House A is a three-year-old green home in Asheville. It was certified by the Green Built Homes program; has the perfect amount of insulation, a well-designed and installed energy-efficient HVAC system, and a new solar photovoltaic (PV) system; and is beloved by its owners for the comfort and low-utility bills that it offers. But, they need to move out-of-state for work and the house is put on the market to sell.

House B was built around the same time across the street with the same square footage and, for all intents and purposes, looks aesthetically the same as House A. But, this house has no green features. It leaks air causing comfort issues, the heating and air system is code-minimum for energy efficiency, and it’s full of incandescent light bulbs. Its owners are looking to downsize and put it on the market at the same time as House A.

How can the owners of House A ensure they obtain an appraisal value and sale price that’s higher than that of House B?

Think about the green features of House A as a money-printing machine sitting on the floor in the corner of the living room. Imagine that every day for the past three years, the machine printed out a crisp, clean and authentic $20 bill that now amounts to $21,900. And, that it’s going to continue to do so for the life of the home.

Effectively communicating the financial value of the green featuresor, the money-printing machinewill help ensure a higher appraisal value and sale price. Providing documented evidence of the Green Built Homes certification, the added insulation, the builder’s extra costs for the energy-efficient HVAC system and the other features will substantiate claims that they’re worth more money than the code built features of House B. Advertising the house’s added comfort, healthy indoor air quality, lower energy bills and other features will help the homebuyer be more comfortable with the higher sale price.

To get the higher appraisal value, the appraiser needs to be able to accurately compare the additional value of House A’s green features to similar homes that also have money-printing machines, and then compare those to houses more like House B that don’t have them. If there is evidence in the market that the green features contribute to a higher appraised value and sale price, the appraiser can add additional value. If there’s not, they can only do so in very limited circumstances.

The advantage of a “green” appraiser

Good news: A national certification program exists for green-certified appraisers. This program trains appraisers to understand and properly value houses with renewable-energy systems, energy-efficiency measures and other green features. While lenders cannot request a specific green-certified appraiser for an appraisal, a builder, homeowner or real estate agent can request a green-certified appraiser or, at the least, one that is knowledgeable of green home valuations. If one is available, great! If not, another appraiser can be requested until an accurate appraisal is performed.

Bad news: There are only two green-certified appraisers in the entire state of North Carolina! Why is that? Well, the certification program is five days long, is not free and even when appraisers have completed the program, so few builders, real estate agents, homeowners and lenders know about the program that no one asks for them, making the certification not worth the trouble. And, in markets where green home data is not readily listed in MLS transactions and well-known to home buyers and sellers (note: not the Asheville market), the green-certified appraiser won’t have any comparables to use, preventing them from providing additional value for the green features, even though they’re certified to do just that.

A shorter, less costly green certification program for appraisers is needed in North Carolina. Combined with an increased availability of comparables data, a major part of the problem can be solved.

The role and resources of real estate agents

Agents in the Western North Carolina market readily list green features in homesmore so than any other market in the state. But, that process is still a manual one whereby the agent has to first find the necessary information, then upload green home certification documents, check the necessary green feature boxes, list additional features in the comments and input a home energy rating number in the right place.

Is there a faster and better way? Yes, there is, but it’s not being used!

Green home data is readily available electronically (computers!) and can be shared instantaneously (internet!) but these capabilities are not being used by MLS directories in the state, including in Western North Carolina. If they were, every time a home was listed on the MLS, a simple data process would pull the green featureshome energy rating, insulation levels, green certifications, solar PV size, etc.into the listing and make sure that they’re accurate. (A special note here: a HERS rating of zero means the home is net-zero energynot that it doesn’t have a home energy rating!)

How would green home appraisals and sales transactions be better with these data capabilities?

Real estate agents would save time (and money) by having listing data auto-populated for them.

This data would be sourced from verified databases to ensure their accuracy (note: an ENERGY STAR® microwave does not result in an ENERGY STAR®-certified home).

Home energy ratings, green home certifications and other features would be readily available for Appraisers and real estate agents to use for comparables.

Homebuyers would be able to more readily view the wealth of green features in homes and seek out the ones with them, encouraging non-green homes to take action.

There are also simple ways to work around any potential drawbacks to increased automation of green home listings.

What if the Realtor doesn’t want to list those green features? No problem, just click the “don’t include” button and they go away.

What happens to green features that may degrade over time, or a change to the home that makes it use more electricity than at the time of the original home energy rating? No problem, because the features are populated electronically and come with a timestamp so you can see when the rating was performed, or system installed, and determine if updated information is needed.

Key takeaways

First, green homes are worth more money than others. Earlier this year, North Carolina Building Performance Association found a 9.5 percent sale price premium for energy-efficient, green and high-performance homes sold in the Charlotte, Triad and Triangle markets combined over 2015 and 2016. The Triangle market alone yielded a 22 percent increase. We don’t yet know what the data shows for the Western North Carolina market, but perhaps we should find out!

Second, there is a tremendous opportunity for the Western North Carolina real estate community to demonstrate support for and leadership in green homes by requesting their MLS directories to take action on automating green feature information. There are a wealth of resources available to do so.

Third, to ensure that green homes like House A receive higher appraisal values and sale prices, green-feature data needs to be readily listed in MLS directories and effectively communicated to key parties in the transaction, particularly the appraiser. And hopefully, particularly to the green-certified appraiser. The more commonplace money-printing machines are in green-home listings in the area, the more additional value they can carry in real estate transactions.

Hopefully, the ongoing improvements to comfort, health, safety, energy usage and other benefits provide ongoing reason to buy and live in green homes, even if the up-front cost may be a little higher. After all, there’s a money-printing machine in the corner of the living room.

Ryan Miller is the founder and executive director of North Carolina Building Performance Association, the state’s not-for- profit trade association for energy-efficient, green and high-performance construction companies and professionals. In January 2018, the National Association of Home Builders awarded Ryan the 2017 Young Green Professional of the Year award in part due to his work to “green” North Carolina’s MLS directories and increase the visibility of green homes in the state. Learn more about this work at

You can also view this article as it was originally published on pages 68-69 of the 2018-2019 edition of the directory.