Fire Your Tech-Deficient Home Appraiser

Almost since the beginning of technology, it seems, home appraisers have failed to keep up with the times.

CE Pro often laments that hardwood floors, pretty bathrooms and fancy countertops provide quantifiable returns on investment, but future-proofing technologies such as structured wiring do not.

And now comes the green movement and appraisers aren’t buying that either.

During the recent NAHB National Green Building Conference, sponsored by the National Association of Home Builders, builders seemed especially frustrated by the inability to get their green technologies recognized by lenders and appraisers.

Anecdotal evidence collected by the NAHB indicates that builders have been ale to sell sustainable homes “considerably faster than the traditionally built new homes …”

But that fact doesn’t seem to sway the mortgage community.

According to an NAHB report on the conference:

Green builders, however, have little immunity from the tight financial conditions that have been plaguing the housing market and imposing difficulties for both home buyers and sellers. And the widespread problem of low appraisals — driven largely by a glut of foreclosed properties and a slow market — has been doubly frustrating for green builders because the vast majority of appraisers are unable to recognize the value that green features add to the home.

Energy efficiency, according to speakers at the conference, remains the most salient aspect of the industry’s move to sustainability, and is the one benefit that’s most easily recognized by consumers. Unfortunately, the prospect of sharp reductions in monthly utility bills has not gained much attention from the lending community, and mortgages recognizing those savings remain mostly an idea whose potential has been largely unrealized.

Fire Your Appraiser

Guess what? If you don’t think an appraiser gets it, you can request another one, according to Rick Porter of PowerWorks, a sustainability consultant.

“Green homes face a red light,” he said at the conference. “Appraisers don’t understand costs and buyers can’t get the full financing they need.”

In his session at the event, Porter asked builders to raise their hands if their customers had ever been offered an energy efficient mortgage (EEM) or energy improvement mortgage (EIM) or that an appraiser had solicited information on the energy features of one of their homes.

Evidently, there were a lot of blank stares.

Porter cited Fannie Mae guidelines advising lenders not to assume that an appraiser is competent.

He said, “You have every right to say I want a competent appraiser. You do not need to roll over on this. If they have not seen or appraised a green home, ask for an appraiser who has appraised one of these homes or has knowledge in energy efficiency.”

Builders and consumers apparently don’t understand they can speak to the appraisers, “but as long as they are not unduly trying to influence the valuation, they can voice their concerns through the lender and Appraisal Management Company,” according to the NAHB report.