Until the market for green homes matures, what’s an energy-minded home builder to do? Though some form of green building certifications have been around for 15 years (Energy Star, for example), green building is not yet mainstream. In other parts of the country, like Seattle and Denver, green residential construction is close to 25% of the market.
“Right now, homeowners pursuing their green dream home, especially in challenging real estate markets, will need to do their homework—and then some,” says Claire Anderson, Home Power’s managing editor.
Anderson and her husband, Shawn Schreiner, are no strangers to green design and energy efficiency. He installs PV systems for a living and she has a background in ecology and sustainable systems, including ecological home design.
In 2009, they started researching banks to seek a construction loan. However, the banks required a licensed general contractor to oversee construction. As a former job coordinator for a national builder and with previous home building experience, Schreiner couldn’t justify spending an additional 15% to 20% on a general contractor when he could do most of the work himself or coordinate subcontractors. Although the couple had some savings to begin, they didn’t have nearly enough to fund their entire project. After hitting a wall with the banks, they negotiated private loans, with the idea that they would seek conventional financing once the house had its certificate of occupancy.
In May 2011, with the house complete, they were ready to roll their four loans into one lower-interest, conventional mortgage. Anderson had carefully researched rates and terms, and selected a local bank. The bank selected an appraiser who claimed to have experience in “green” appraisals. Even though Anderson took pains to prepare a five-page paper documenting the home’s energy-efficient and green attributes (passive solar heating, highly insulated walls and roof, high-performance windows and doors, and the Earth Advantage Institute’s platinum rating), the appraisal came in not only too low, but also inaccurate.
Rather than choosing another bank, Anderson thought that a mortgage broker might widen their financing horizons. She found a Texas-based firm that promoted EEMs, and was interested and capable. Meanwhile, she educated herself about the state of certified green appraisers in the area.
“The first few appraisers I spoke to were very ‘light green,’” says Anderson. “Their definition of green was pretty much limited to finishes—like the recycled content of carpet—while I was speaking of a ‘deeper green’ home—things like passive solar gain and a significantly reduced energy footprint, which translates into real financial savings, year after year.”
The second appraisal was done by the only green certified appraiser in the area and, according to Anderson, “was completely different. The appraiser had another person with her who she was training. As soon as she stepped out of the car, she immediately started elaborating to her trainee about the home’s details—the overhangs that would help shade the windows in summer, the large number of south-facing windows for passive solar gain, the thermal mass in the floor, the R-values of the structural insulated panels. I felt confident that our home was finally being valued fairly,” says Anderson.
“The appraiser took an extra week to research comps and charged an additional fee for extra time invested, but her attention to detail was worth it,” says Anderson. The second appraisal came back weighted toward comps, but comps that were indeed comparable as they, too, had green and efficiency features. Although it had taken Anderson four months of effort, the second appraisal gave their home the value they needed to obtain their mortgage.