(LEED) Green Certifications

[vanguard]

Ran across this on the MSN website. One of the six in-demand certifications is listed below. How beneficial is this type of certification for residential appraisers? Would it provide greater support for commercial assignments. Could this accreditation procure an additional level of service and increase our income?

6 in-demand job certifications

5. LEED accredited professional
What they do: When most people hear Leadership in Energy and Environmental Design, or LEED, they think of sustainable or environmentally friendly buildings. Yet it can also signify someone with the knowledge and understanding of what makes a building LEED-certified. LEED accredited professionals act as advisers to building owners, designers and operators to help them earn their "green" ratings.

Certification details: There are three levels of certification available from the U.S. Green Building Council:

LEED Green Associate: This one covers the basics of LEED ratings. Candidates need to pass an exam to show their understanding of green design, construction and operations.

LEED AP with specialty: This requires three years of real-world experience and the completion of a LEED-certified project. The candidate must also pass one of five specialty tests. The five specialty areas are building design and construction, interior design and construction, existing building operation and maintenance, homes, and neighborhood development.

LEED AP Fellow: This is the highest level of certification and is given to industry leaders with extensive experience.

 

[Couch Potato]

It's easily as useful as putting solar panels on your roof.

 

[Lobo Fan]

People pay to have their properties certified at the different LEED levels. The fees start at around $2,000 for a house and go up from there. NMostly paperwork and documentation. HERS requires actual testing of the structure for leaking air and other such things.

A lot of this is government sponsored. There is a bill before Congress right now called the SAVE act. Part of the bill will require appraisers to add value for green features regardless of market reaction. I guess they will hand out the "magic list". Triple pane low e windows are worth $zzz, and solar PV panels are worth $XXXX, etc.

 

[JSmith43]

Hopefully, this legislation will go down in flames like the legislation requiring that REO not be used as comps, etc.

The LEED certification might be a good idea, at least, the lower level one.

McK............ has an on line course that I took for CE on this topic.

My head didn't hit the keyboard too many times.

 

[Don Clark]

I took a course in February that granted me a certification as a Green Valuation Specialist. It was 2 days long and covered a wide range of "Green Building Tecghnology. I recently assisted a member of our state board who was required, on behalf of the board, to write a response to HB 433 in Virginia that states


Be it enacted by the General Assembly of Virginia

1. "That the Real Estate Appraiser Board shall evaluate the development of a continuing education curriculum for licensees that includes the effects of the use of energy efficiency and renewable energy equipment on the determination of the fair market value in the appraisal of non-income producing residential real estate".

2."On or before November 1, 2012 the Real Estate Appraiser Board shall report to the Chairman of the House Committee on General Laws and the Senate Committee on General laws and technology and housing Commission".

My thouhts:


•
So there is no misunderstanding, going green does not mean that one needs to be an environmental wacko, a global warming nut, or that you are not such a person. For an appraiser, trying to deal with a very timely subject it will likely mean what impact such issues will have on the appraisal process. How will an appraiser know when they encounter something that is part of green technology, and if they do, how can that be measured as to market reaction?

As a case in point, many are already in the learning curve such as the Realtors and Appraisers in the area know as the Research Triangle of North Carolina

A study was prepared by Realty Analytics, NC for the residential committee of the Triangle Chapter of the U.S. Green Building Council (USGBC) (http:.triangleusgbc.org), in support of its mission to provide real estate professionals with critical information on the impact of green in the Triangle’s residential housing market. The study examined the Triangle MLS for all sales of detached new construction, closed between January 2010 and December 2011. Their findings were that certified homes have consistently outperformed the non-certified group, and are steadily increasing their market share.

Some facts from the study:
· Green home sold 41 days quicker, or almost 30% faster.
· Sold for $13 per square foot more or 12 % higher.
The competent appraiser of the future will of necessity need to acquire the knowledge and expertise to consider,

The course I took was 2 days long, and had 2 required test for certification. The course is available through www.porterworks.com

 

[hastalavista]

So there is no misunderstanding, going green does not mean that one needs to be an environmental wacko, a global warming nut, or that you are not such a person.

I agree with Don.

I've taken the AI's green courses (commercial & residential) and attended several other presentations regarding green development.
Going green is more than a solar roof, sustainable products used in the construction of the building, etc. It can include other things from how the construction-project is managed (what is done with the materials that are not used... if a remodel, what is done with those demolished materials) to how the property is landscaped (low-irrigation landscaping, shade trees, etc.).
One doesn't have to be an environmental wacko to employ green considerations in their building/purchase decision-making process. I am no greenie by any stretch, but I've been holding off replacing my roof hoping that the solar tile technology will improve to the degree where it makes financial sense to pay the extra money to replace the roof with the solar tiles (it isn't there yet): I may have to wait another 25-years.

Becoming LEED certified is another ball game and depending on what type of certification one is pursuing, can be demanding. It can also be another business opportunity.

Depending on the market in which one operates, learning the basics of green building should be considered a necessary tool to have in one's tool belt. In those cases where I'm appraising a property where the owners have spent a lot of money in their green design, they always ask me what competence I have to evaluate those features. In this regard, the courses I've taken are extremely helpful.

In regard to the new construction homes obtaining a premium, I'm inclined to believe that.
In regard to re-sale homes in a non-"green" development obtaining a premium, that jury is out. Even in very "green aware" markets (like Menlo Park, CA), added value is not always the case. I called on a property I was using as a comp; this was net-zero energy footprint, newly constructed (custom-spec, not in a tract). Sold price was around $2,500k. I asked the broker if the green-design created a premium. His response was, "In this area, you think it would, but it didn't." He went on to say that he still thinks the premium-aspect is down the road (at least, for the resale market).

 

[JSmith43]

In regard to the new construction homes obtaining a premium, I'm inclined to believe that.
In regard to re-sale homes in a non-"green" development obtaining a premium, that jury is out.

Very astute. This is mostly about branding and whether the green branding can be recycled by a seller within the resale marketing paradigm.

The builders have shiny brochures & are the ones that did the paperwork and paid the fees to help document the green credentials of their home. Joe RE agent is probably not going to be able to make as strong of a case upon resale right now, but maybe some day.

Any one want to buy a used Green Prius? It has 50,000 miles on it & I only changed the oil twice since I wanted to preserve the environment?

 

[David Mescon]

I'm gonna jump on this bandwagon too. Of course a builder is going to charge on a cost plus basis for any green technology incorporated into the construction of a home - they don't work for free. That has no relationship whatsoever to the contributory resale value of such elements. It's still pretty much nothing more than hype. Some of these features do have contributory value in some markets, however, nobody can mandate anything other than consideration of such features without corrupting the appraisal process.

On another note, IMO, educating appraisers about these various technologies is a worthy cause, because you can't evaluate what you don't understand.

 

[Scott R Marshall]

Very astute. This is mostly about branding and whether the green branding can be recycled by a seller within the resale marketing paradigm.

I tend to agree with this statement. Every market is different and in every instance reactions should be analyzed to determine trends, but in general terms my experience has been the "green" buyer buys new and is willing to pay a premium. That same buyer is not looking at "used" homes. The buyer looking at "used" homes, while maybe desiring the concept of "green", currently does not want to pay that premium on a resale.

So we are left with the same "green" dilemma which appears to have been a perpetual constant since those first solar panels came out in the late 1970's. While there is a "green" market and has been since the late 1970's, it is currently not the driving influence within the market. Maybe at some point this dynamic may change but it hasn't happened in 30+ years and probably will not happen for some time.

If energy prices ever reach the tipping point, maybe the change will occur then, but those high prices have never lasted long enough to readily impact the market and in most cases, those high prices are followed by very low prices for a time. Maybe if it becomes a government mandate, then the market will be "forced" into a reaction but that concept is very unpopular for many and too expensive for most. Personally I think at some point the market will go that way, if for no other reasons than the technologies involved with it become more advanced and the prices associated with it go way down. And who doesn't want to save energy (unless of course it means any type of personal sacrifice, then the converse is true in this country). But this push by factors outside of the market to go "green" will likely be met with the same eventual market reaction as when it was attempted in the late 1970's - early 1980's.

 

[JSmith43]

Any CG's taken on a LEED certified building assignment lately?

The green developers tout that LEED Certified buildings rent for more $ per SF.
They also tout that NOI is enhanced, perhaps 5% or more, depending on the scenario, vs non LEED certified buildings.

Of course, poor management can probably rise to the occasion & diminish a 5% advantage due to passive design, breathtakingly efficient synergistic systems that would make Yoda proud. Maybe The Force would extract higher market rents, over and above what the mere calculable cost savings might predict.

Oh well, a good topic for the Commercial forum