	A Member Services Organization

Information for Appraisers

Who cares?
Home buyers. They are placing greater emphasis on the energy efficiency of a home in their decision to buy. This trend in the home market has been shown in a number of recent consumer market surveys:

Nation's Building News - 1996 survey of home buyers conducted by the National Association of Home Builders and Fulton Research of "Top Ten Trends in Consumers' Demand in New Homes". Increased energy efficiency rated number nine.

National Family Opinion Research - 1997 survey of consumers in 39 regions who had bought a new home in the past 36 months. Survey found:

	89% of home buyers want energy efficient upgrade options
	83% are most likely to use a builder who offers these upgrades

1998 Pulte Tucson Division Survey - Found that 69.9% of buyers would spend an additional $1,200 - $1,500 for upgraded energy efficiency if it would result in annual utility savings of $300.

Appraisal Journal - 1998 study commissioned by Environmental Protection Agency reported that value of a home increases by an average of $20 for every $1 decrease in annual utility costs.

A Home's Worth
Nationally there is an emerging market force towards energy efficient homes. From Florida to Alaska Real Estate Appraisers are increasingly using home energy ratings to reflect the value of the energy efficiency of a home in the home's appraisal.

And That's Not All
Real estate professionals across the nation are also aware of this market opportunity. A recent national survey of real estate professionals conducted by the Realtors National Market Institute found:

	Potential home buyers ask more questions about the cost of maintaining a home than anything else.
	94% of new home buyers believed energy features were important in their buying decision. Energy features ranked in importance above such popular features as wall-to-wall carpeting, dishwashers, and fireplaces.
	78% of real estate appraisers believed that energy efficient homes were worth more - approximately 5% more. (Source: South Carolina Electric & Gas)

A home energy rating provides a real estate appraiser the benefit of an on-sight inspection by a trained and certified residential energy efficiency professional, the home energy rater. With this independent, non-regulatory inspection of the home, consumers will have greater confidence that the home they are considering buying is energy efficient. The mortgage industry also offers preferred financing for homes that are documented to meet the EPA’s ENERGY STAR Homes standards.

Energy Improvement Mortgages underwritten by Fannie Mae, Freddie Mac, FHA, and VA also offer an opportunity for buyers of older homes to make energy improvements and roll the improvements into the mortgage loan.

The federally sponsored secondary mortgage markets of Fannie Mae, Freddie Mac, and FHA allow appraisers to capitalize the flow of energy savings in an energy efficient home and add it to the market value of a home in the appraisal. The underwriting guidelines governing this can be accessed by clicking their respective icons.

Links
RESNET Mortgage Lender Directory
(Lenders offering Energy Mortgages)

How Much Larger is My Market
(with the 2% stretch)

Energy Star
(Mortgage Products)

Appraisal Journal

Pulte Homes Survey