Making the Invisible Visible: Valuing Energy Efficiency Improvements in a Real Estate Transaction...

Making the Invisible Visible:Making the Invisible Visible:Valuing Energy Efficiency Improvements in a

Real Estate Transaction

October, 2013

CNT Energy is a Think-and-Do TankCNT Energy is a Think-and-Do Tank

CNT Energy is dedicated to helping communities and consumers save energy and money

•Dynamic pricing and smart grid– Ameren Power Smart Pricing– ComEd Residential Real-Time Pricing

•Energy efficient buildings– Residential – Commercial and municipal buildings

•Regional Energy Planning

Laura Reedy StukelLaura Reedy Stukel

• Realtor, LW Reedy Real Estate

• NAR Roles– GreenMLS Toolkit Team– Green Resource Advisory Council– Real Property Valuation Committee – Consumer Communications Committee

• BPI Role– Co-Chair, Real Estate Certificate

Standard Working Group

Market FocusMarket Focus

DemandDemand

Policy Incentives Market

GreenGreen

MLSMLS

Defined System for Market ValueDefined System for Market Value

Graphic courtesy of NAR www.greenthemls.org

Why Now? Why Now? Efficiency Demand is StrongEfficiency Demand is Strong

Source: NAR Home Buyer/Seller Profile

Why Now? Why Now? Transactions GrowingTransactions Growing

Source: National Association of REALTORS®

7-Step Blueprint7-Step Blueprint

1. Document Improvements

2. Data for Appraisals

3. Data for MLS

4. Training Opportunities

5. Report Inventories

6. Standardized IT Solutions

7. Work with Financial Institutions

1. Document Improvements1. Document Improvements

Document energy efficiency features and improvements using consistent, standardized methods.

2. Data for Appraisals2. Data for Appraisals

http://www.AppraisaInstitute.org/education/green/

Ensure that the data about home energy efficiency improvements is incorporated into the appraisal process.

3. Data for MLS3. Data for MLS

IHP Silver Certificate

RETS Green MLS Fields: VerificationsGreen Verification Sponsor

Green Verification Program

Green Verification Rating

Green Verification Version

Work with the MLS community to ensure that data about home energy efficiency improvements are incorporated into for-sale listings.

Step 4. Training OpportunitiesStep 4. Training Opportunities

Capitalize on existing high-quality continuing education and designation training.

APPRAISAL INSTITUTE CE 575001563 CASE STUDIES IN APPRAISING GREEN RESIDENTIAL BUILDINGS APPRAISAL INSTITUTE CE 575001564 INTRODUCTION TO GREEN BUILDINGS APPRAISAL INSTITUTE CE 575001741 CASE STUDIES IN APPRAISING GREEN COMMERCIAL BUILDINGSAPPRAISAL INSTITUTE CE 575001788 CASE STUDIES IN APPRAISING GREEN RESIDENTIAL BUILDINGSAPPRAISAL INSTITUTE CE 575001789 INTRODUCTION TO GREEN BUILDINGS: PRINCIPLES & CONCEPTSCHICAGO CHAPTER OF THE APPRAISAL INST. CE 575001767 INTRODUCTION TO GREEN BUILDINGSILLINOIS APPRAISAL EDUCATION INC CE 575001806 APPRAISING GREEN RESIDENCES MCKISSOCK APPRAISAL SCHOOL CE 575001534 FOUNDATIONS IN SUSTAINABILITY: GREENING THE APPRAISAL & INMCKISSOCK APPRAISAL SCHOOL CE 575001535 THE NUTS & BOLTS OF GREEN BUILDING FOR APPRAISERSMCKISSOCK APPRAISAL SCHOOL CE 575001576 INTRODUCTION TO GREEN BUILDINGS FOR APPRAISERSMCKISSOCK APPRAISAL SCHOOL CE 575001681 INTRODUCTION TO RESIDENTIAL GREEN BUILDINGS FORMCKISSOCK APPRAISAL SCHOOL CE 575001760 THE GREEN GUIDE TO APPRAISING MCKISSOCK APPRAISAL SCHOOL CE 575001803 MODERN GREEN BUILDING CONCEPTS NAT ASSOC OF IND FEE APPRAISERS CE 575001721 THE APPRAISAL OF GREEN HOMES

Step 5. Report InventoriesStep 5. Report Inventories

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Source: Colorado Energy Office © 2011 State of ColoradoThese Metropolitan Statistical Areas account for 90% of new home construction in Colorado.

Census BureauMetropolitan Statistical Area

Number of Single Family Homes Built FY13

Percentage of New Homes with HERS Rating FY13

Denver-Aurora-Lakewood

7922 73%

Fort Collins-Loveland 1676 29%

Greely 1648 24%

Colorado Springs 607 18%

Boulder 564 100%

Grand Junction 435 25%

Pueblo 219 23%

Step 6. Standardized IT SolutionsStep 6. Standardized IT Solutions

MLS Operators

Agents

Tax Data

Programmatic Data

HPXML

Develop standards and IT solutions that allow quicker and more automated transfer of data.

Brokerages

Aggregators

7. Work with Financial Institutions7. Work with Financial Institutions

Ethics RuleAn appraiser must promote and preserve the public trust inherent in appraisal practice by observing the highest standards of professional ethics.

Competency RuleAn appraiser must: (1) be competent to perform the assignment; (2) acquire the necessary competency to perform the assignment; or (3) decline or withdraw from the assignment.

Scope of Work RuleAn appraiser must properly identify the problem to be solved in order to determine the appropriate scope of work. The appraiser must be prepared to demonstrate that the scope of work is sufficient to produce credible assignment results.

Work with partner financial institutions to ensure selection of qualified appraisers.

Next Step: Apply the BlueprintNext Step: Apply the Blueprint

Program Data (Information already being captured as part of energy efficiency programmatic work)

Learn More!Learn More!

More information on unlocking the value of high performance homes can be found at:

 http://www.cntenergy.org/innovation/valuehph/

The full paper is available for download at 

www.cntenergy.org/media/Unlocking_Value_2013.pdf 

Join a webinar on Wednesday, Oct. 2 at 11 a.m. www.cntenergy.org/events

On Twitter, follow the hashtag #VisibleValue