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The green housing projects are rising speedily, but developers would like to see them mushroom faster. While environmentally friendly technologies are rapidly growing, there is one aspect which still has not fully kept pace with the emergence of green housing on the real estate market the issue of appraisals. Envision you are wanting to build a standard $500,000 property. On top of the cost for the standard build you have your architect design the property to utilize the full potential of the sun and you install solar panels as well as quality insulation. This will cost you some hefty money, so let’s say the final costing goes up to $600,000.

Unfortunately this is not how your bank or mortgage appraiser looks at 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.

Shall we carry on with our illustration? Whilst the build cost an extra $100,000 the bank or mortgage company will only approve the value of the property has increased by $50,000 With a 20% down payment, you will need $160,000 in place of of $110,000. With a high-ratio mortgage 5% down payment, you will have to save $77,500 instead of $27,500. That is a large increase in particular if you are on a budget and every bit of savings matters. So with such a massive down payment you have to assess your priorities and these could be forgetting about going green, or making do with cheaper and possibly inferior technology.

Nevertheless, as a green MLS GTA professional I realize wanting to go for a green property does make a difference. Look at it this way, green real estate sell over 20% faster with an 8.5% increase on sale price, according to Green Work Realty report. Unfortunately, when you deal with an appraiser having little or no experience with green housing technologies (and that’s quite probable, especially if you are among the green pioneers in your area), your home’s value will most probably be underestimated.

Until appraisers gain the training, there is little that can be done. Nevertheless, I believe there will be strong initiatives soon to standardize indicators of environmental and energetic efficiency, which will certainly help appraisers (and future owners) to move forward. Green real estate is about money as well as the all important environment. Take buying a car – would you buy a motor vehicle without learning about how fuel efficient it is? Understanding property energy consumption is the natural next step.

Green real estate projects are booming, but not as quickly as developers would like them to. While they are moving forward very fast, appraisals are not keeping in step with this fast growing industry. Think about it you are going to build a standard $500,000 property. In addition, you decide to invest into high-quality insulation, solar panels, and ask your architect to design the property to make use of sunshine to its fullest potential. This will cost you some decent money, so let’s say the total costing goes up to $600,000.

Nonetheless, your bank’s appraiser looks at it differently. 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 price of the property but more about resale value.

Why don’t we finish our illustration. Your bank will only accept a $550,000 value. This swells your deposit by $50,000 working on a 20% down payment. For those of you that can’t save the 20% down payment and wish to take out a high-ratio mortgage, (5% down payment) then your payment will be $77,500. That is a very large amount of cash to get hold of straightaway. So what do you do? Can you still afford it? Do you need to look at inferior option such as older and cheaper technology? Do you write off the idea altogether?

Still, as a green Toronto listings agent I realize choosing to go for a green property does make a difference. According to Green Work Realty opinion, green properties are priced 8.5% higher on the resale market, and also sell 22% faster. This information doesn’t help though if you are dealing with bank or mortgage business appraisers who don’t have much if any experience with the green property technology.

Until appraisers get the experience, there is little that can be done. Regardless, I think there will be strong initiatives soon to standardize indicators of environmental and energetic efficiency, which will definitely help appraisers (and future owners) to move forward. Even though green property is about the environment and performance it is also about price. Not many of us are willing to buy a car without at least a elementary knowledge about its petrol consumption. As a result it is only common progression when using the same analogy when buying a home.