Atlanta Green Building Council Highlights Green Appraisal Solutions

The Green Building Council of the Greater Atlanta Home Builders Association recently hosted Sandra Adomatis at the Southface Energy Institute to discuss appraisals of sustainable homes. Sandra, of Adomatis Appraisal Service in Punta Gorda, FL, is a nationally recognized speaker with more than 25 years of real estate appraisal experience. She’s authored or collaborated on most of the Appraisal Institute’s efforts to address sustainable building.


Sandra clarified the Dodd-Frank Wall Street Reform and Consumer Protection Act requirements: builders, brokers & lenders CAN talk with appraisers, provide documents and accompany appraisers on their inspections. The focus is on providing information while preventing pressure to arrive at a particular value conclusion. Sandra recommends builders document their sustainable building components, especially those that can’t be seen (like insulation) when the project is finished.

The starting point for communicating the value of your green home should be the Appraisal Institute’s “Residential Green and Energy Efficient Addendum”. It’s available as a free PDF on the Appraisal Institute’s website – it’s currently linked on the home page. It’s a four-page form and glossary that you can use to document the components of your project and other amenities like the Walk Score and access to public transportation.

The form will help make appraisals more efficient because it standardizes how we communicate. You can add additional documentation to support what you’ve recorded on the form. You can also use the form as a starting point for your project if you’d like to list your priorities before you begin.

If you’ve used the form and still receive a value less than your expectation, don’t contest that value based on your expectation of the market. Back up your concerns with facts and figures that communicate the value you think is under estimated. Working with lenders to find competent and experienced appraisers should significantly reduce disagreements over the value of our green homes.

The Appraisal Foundations’ Uniform Standards of Professional Appraisal Practice (USPAP) encourages appraisers to have competency to review a building before they accept the appraisal assignment while Fannie Mae explicitly requires competency. You can use these standards to qualify your appraiser. Sandra recommends submitting a statement to the lender to require the appraiser to have green valuation education through the Appraisal Institute.

An NAHB member in St. Louis has had success with the multiple lenders when using a specification for the appraiser. If a lender won’t pay attention to this issue, we should encourage the use of other lenders. That’s the best way to change the market expectation.

Green homes are typically code-plus homes. Sandra recommends making a simple comparison chart between a home built to the building code (the minimum construction standard) and your green home. The elements that you compare should include things like a HERS rating, average monthly utility costs, design wind load, quality of windows, HVAC efficiency, incentives, water conservation strategies, etc. Making this chart for each of your homes will help appraisers and buyers quickly appreciate the difference between your work and other projects.

In the image: Sandra Adomatis and Lamar Ellis. At the time of our event in late March 2013, Lamar was the only appraiser in Georgia to have completed the Appraisal Institute’s 14-hour green valuation education course. In contrast, at the same time, the AI lists 354 appraisers in its search results when you enter “sustainable green buildings” in its “residential property types” category for Georgia.

If you want to find an appraiser who has completed the “Valuation of Sustainable Buildings” course for residential properties, you can use the registry of appraisers for the program on the Appraisal Institute’s website.

If you’d like to find specific requirements of the Dodd-Frank Act, Title XIV is the “Mortgage Reform and Anti-Predatory Lending Act” section of the legislation. It starts in Section 1400 on page 761. Subtitle F, starting on page 810, addresses “Appraisal Activities”. The Library of Congress has published an PDF of the Dodd-Frank Act that you can save or download to your computer. We keep it on a tablet device. Don’t forget you can search by keyword to move around the document more quickly – even if the keyword for which you search is a section number or other designation.

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