Will green homes increase my home value?

Ifyou offset your energy bill via using green homes, solar power, wind turbine, ICF homes, passive or active energy saving methods will this increase the value of my home?

No absolutely not, unless an appraiser can prove it.

The only way you will get any direct value of these types of items is to use them. Most of the time, the only way you’ll ever get your money out of them is to live in your home for 20 years or more. Unless there are sufficient homes in your market area and the Realtors recognize this and add this information to the MLS database so that appraisers and Realtors can study this and use this in determining home value, it will never be valued.

Let me give you two examples. This home I looked at the other day offers both an extensive solar panels and a wind turbine. Both of these items are a significant investment. The owner was hoping to sell the home and get all of the value that the owner spent on installing all of these “green items”.

The issue is when it gets to the appraisal, the appraiser can’t prove this. Statistical data taken from the Appraising journals or the like do absolutely no good and provide no support for home values unless they are with a reasonable distance from the subject and there is enough data to support these types of sales. Especially, if the studies are completed in California and the home I’m appraising is located in Spokane, WA.

Several new builders have used ICF homes. These are insulated concrete forms. Some say the construction can cost up to 2% to 10% more than regular construction. Some argue that the cost is the same as typical construction and the benefits are better. Some of the benefits include better insulation that may lower the cost of heating and cooling bills, higher sound prove, steadier temperature are some of the best benefits. These are some of the main benefits, but I’m sure these are not all of them.

The reality is I’ve appraised several of these types of homes and completed several extensive searches for these types of homes. It is very difficult to locate these homes in the MLS databases; I’ve used two different databases in Washington State. When a real estate appraiser finds homes that offer ICF constructed homes, the sales differ (in terms of square footage or design, lot size or location) by so much that the homes are simply not comparable.

I’ve seen and spoke to Realtors that tell me the same thing over and over. I pull data that suggested the same thing. There is not enough data to place a dollar amount for these energy efficient items that is significant or justify the investment to install these types of products. The good news is that in all cases, people and the market like many of these ideas and they will even buy the home, but they will not pay significant money or the full cost of installation to buy these items in an open, competitive market.

When selling your home

List the improvements and the green items that you’ve installed for your home. While it may or may not sell for more, it appeals to buyers and buyers may be willing to buy your home first and maybe for more, if your appraiser can prove this or you have a cash buyer. You may be able to negotiate the green items as personal items and sell them outside of the real estate.

When refinancing your home

When buying a home