Appraisal Institute Upgrades Tool to Aid the Valuation of Green Home Features
May 18, 2017
The Appraisal Institute has released an updated research tool to assist appraisers and users of appraisal services in understanding market reactions to green and energy efficient homes. In updating the AI Reports Residential Green and Energy Efficient Addendum, the Appraisal Institute intends to position appraisers to analyze data more efficiently and to report the analysis in a format that is more readable and consistent with mortgage industry information standards.
The Appraisal Institute originally issued its Residential Green and Energy Efficient Addendum in September 2011 as an optional addendum to commonly used appraisal forms for loans sold and guaranteed by the government-sponsored enterprises (GSEs) and government agencies. The Addendum was most recently updated in March 2013.
“The objective of this Addendum is to standardize the communication of the high performance features of residential properties,” said Appraisal Institute President Jim Amorin, MAI, SRA, AI-GRS. “The Appraisal Institute encourages builders, contractors, homeowners and third-party verifiers to complete the Addendum and present it to appraisers, real estate agents and lenders.”
The Addendum has been reorganized and updated to ease readability and to address continued industry developments in the valuation of green and energy efficiency, including solar systems. It also helps appraisers meet appraisal standards requirements for identifying property characteristics that are relevant to that property type and value.
Also, the Addendum can now be delivered in a digital form using a dataset specification that is based on the Mortgage Industry Standards Maintenance Organization (MISMO) Reference Model v3.5, which enables it to be delivered and read electronically by end-user systems, including those used by mortgage lenders analyzing collateral risk.
“The Addendum can be attached to the MLS listing to provide sufficient detail on sales and listings to assist buyers, appraisers and real estate agents in understanding the high-performance features of the property,” Amorin said. “It also can be shared with the lender at the time of the loan application to assist them in understanding the property type. The lender may engage an appraiser with sufficient knowledge of the property type to provide an appraisal to meet secondary mortgage market guidelines.”
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