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Jose E. Humaran's Blog

By Jose E. Humaran | Broker in Miami Lakes, FL

Guidance on ‘green’ real estate valuation

Appraisers consider a number of elements to gauge the worth of green components in homes and commercial buildings – billing analysis, equipment identification and engineering simulations, for example. A new guide issued by the Appraisal Institute and the Institute for Market Transformation updates information for appraisers.

The two organizations issued “Recognition of Energy Costs and Energy Performance in Real Property Valuation,” an update of the first edition published in 2000, in order to “enhance the credibility of property valuation.”

“The Appraisal Institute is dedicated to helping appraisers and others find, understand and use available information on energy performance in buildings,” said Appraisal Institute President Sara W. Stephens. “As green and energy efficient features play a larger role in the real estate industry, it’s increasingly important that appraisers know how to value those properties.”

The Appraisal Institute’s and Institute for Market Transformation’s guide includes sections on:

• How energy-cost variations affect net operating income and appraised value
• How to assess energy performance in buildings
• How to benchmark energy performance
• Qualifications of energy assessors
• Findings on how buyers and renters place incremental value on energy performance
• An overview of the most common efficiency measures: insulation, windows lighting and HVAC

The Appraisal Institute is a global association of professional real estate appraisers with about 23,000 members in nearly 60 countries.

The guide, Recognition of Energy Costs and Energy Performance in Real Property Valuation, is available online.

Source: Florida Realtors®

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