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Green property projects are mushrooming, but not as speedily as developers would like them to. Sadly appraisals are slowing down the rapid advancement of the environmentally friendly property projects. Take a house that would usually cost half a million dollars to build. In addition, you want to invest into high-quality insulation, solar panels, and ask your architect to design the house to utilize sunshine to its fullest potential. Now going green doesn't come cheap meaning these green choices are going to increase the build price to $600,000. Nonetheless this is not how your bank or mortgage company appraiser values it. David Snook is an appraiser and associate of the real property committee on education for the American Society of Appraisers and he does doesn't think it's about the cost of the property but more about resale value. Let's continue with our illustration. Your bank or mortgage company will only accept a $550,000 appraisal. This increases your deposit by $50,000 found on a 20% down payment. Instead of having $27,500 to pay you would have $77,500, if you were trying for a high-ratio mortgage, as these demand a 5% down payment. That's without doubt more than a little difference. This might force you to consider the cheapest green alternative, using older and cheaper technologies, or maybe you will forget about the whole green idea of the project altogether. However, as a green GTA MLS expert I understand deciding to go for a green home does make a difference. Look at it this way, green houses sell over 20% quicker with an 8.5% increase on sale price, according to Green Work Realty report. This information doesn't help us though if you are dealing with bank or mortgage company appraisers who don't have much if any experience with the green home technology. Until appraisers get the experience, there is hardly anything that can be done. Although there is no standardization for environmental and energy efficiency at this time, I think that they will soon be on their way. Green real estate is about price as well as the all important environment. Take buying a car - would you buy a vehicle without learning about how fuel efficient it is? So when buying your new house, it stands to reason the logical thing to do is find out how energy efficient the house is.
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green housing projects, green house, appraisals,
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