I recently began working with a buyer who is considering building a home and wants to incorporate as many green features as possible!  I think this is a great idea and one that I am all for and think that we should do as much as we can to be as green as possible!  But today, I came across this article that made me stop & think about some of the things that I had not taken into consideration when talking to my buyers about building a green home – particularly about how appraisers will value the items that are put into the home!  The article I saw today on CNN’s website made me realize that, until there is some agreement about how much value some of the green items increase the value of a home, buyers may have to bring more money to the table than they anticipate.  This is because the loan the bank will make is, for example, an 80% Loan to Value – with value being defined as either the purchase price or the appraised value, whichever is the lower!  If the house you are building is priced at $400,000 (and this includes all the green systems and upgrades that will go into the house), but because there is not enough green homes built in the area to get some value for these items, you may not know what sort of value the appraiser is going to put on things like solar panels and solar hot water heaters, then it is possible that the appraised value will come in significantly below the $400,000 purchase price!  So, pre-appraisal, the buyer may be thinking that they are going to get a loan for $320,000 (which is 80% of the $400,000 sales price); however, if the appraisal comes in at, say $350,000, then the bank will only be willing to loan the buyer $280,000 and the buyer may have to come up with an additional $40,000 in order to be able to purchase the home.  This is definitely something that every buyer’s agent should be talking to any of their clients who are thinking of about building a green home here in the Richmond area, where green building techniques are still a relatively new thing!

 http://money.cnn.com/2010/03/10/real_estate/green_homes_redlight/

Anyways, I hope everyone finds the article helpful & points out something that should be considered when thinking about building or buying a green home!  Let me know if there is anything I can do for you as well as any comments you may have on the article!