One Appraiser, Two Appraisers, Can I Get a Third?

What Builders need to know about Appraisers and the process…Plumber

I recently attended the Energy Efficient Building Association conference and was pleasantly surprised to find that there are a number of builders getting significant value added to the appraisals of their home because they know the process and more importantly they know what the Appraiser needs to know to add value.

The Appraisal Process:

Back in the day there was a “good old boy” mentality in the appraisal world. If you needed a house to appraise at ‘X’ amount, you worked your relationship with your favorite appraiser because you could choose to hire them directly. Of course that has changed. Today Lenders require an Appraisal Broker to run the process. The Broker randomly assigns an Appraiser to evaluate the value of the builder’s property. This new system works well to ensure that unbiased people are doing the work.  However, it does not take into account the complexity of different properties.  Also, some Appraisers have more knowledge about various types of construction than others and therefore, better understand value-added features incorporated into a high-performance home.

As a builder of these homes, you should explore your Appraiser’s experience with appraising high-performance homes.  Simple yet important questions to ask:

  • Have you appraised high-performance and energy-efficient homes before?
  • Have you used the Residential Green and Energy Efficient Appraisal Addendum Form 820.04?
  • Are you familiar with the HERS Index?
  • How will you assess the energy features in this home?

If the Appraiser answers are not to your liking, you have the right to request another Appraiser (in a kind manner, of course) who has the appropriate knowledge base for the house in question.  You can also suggest (kindly) that s/he continue to learn more about the value of high performance home features, in order to be assigned to your projects in the future.

New residential construction in a subdivision of a new communityWhat Appraisers Need to Know?

So here we are, at a point in the discussion where we know Appraisers need to be better educated on high-performance homes. We’ve known that Sales Agents, Superintendents, Trade Partners, Code Officials (really just about everyone) needs to gain a better level of understanding about not only what high-performance home features are, but why they are valuable.  Successful Builders are taking matters into their own hands by educating as many people as they can in an effort to increase the appraised value of their homes.  Why?  Because the appraisal is a tool used to justify the price of a home to lenders.  If it costs X amount more to build a well-performing home and a builder wants to be compensated for that extra amount, the house needs to be priced appropriately.  If a buyer agrees to that price, the Lender needs to be able to justify the loan risk, which is the purpose of the appraisal.  Therefore, if the asking price is higher due to it being a well-performing house then that value can be accounted for on the appraisal.

Besides face-to-face training, site walks, open houses, and other professional education events the Residential Green and Energy Efficient Addendum Form 820.04 is another educational tool that Builders are using to help the appraisal industry get up to speed.  The Appraisal Institute’s Green Addendum is the first developed by Appraisers, for Appraisers.  The Addendum highlights features in homes that can add value to the appraisal.  Proactive Builders are taking it upon themselves to fill out Form 820.04 and provide it to the appraiser.  A Builder cannot unduly influence the appraisal process but they can ensure that the right person is on the job and has the correct resources to do that job well. Providing the Green Addendum ensures that.

If an appraiser is supplied an Addendum Form for every high-performance house, it would leave little question on the comparability of the data. It also aids in a more accurate valuation of the property.  EnergyLogic highly recommends getting involved and using this valuable resource.

There are a quite a few interesting YouTube videos on the Residential Green and Energy Efficient Addendum located here

A couple of the best are:

Thank you to Michael Hobbs with Pahroo Appraisal & Consultancy in Chicago for his technical review of this piece.  Michael is a certified appraiser and a wealth of information and has offered to answer additional questions. Michael can be reached via email at hobbs@pahroo.com

 

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Robby Schwarz
Principle, Builder Client Services
EnergyLogic, Inc.

Xcel New Homes Program Ends for 2014, but…

xcelJust a few weeks ago we were notified by Xcel Energy that the 2014 Energy Star New Homes Program funds have been exhausted. Rebates will no longer be issued for the remainder of this year.  This happened last year, then Xcel restarted the program a week later after finding extra funds. Although reopening the program in 2014 is unlikely,  we don’t want to be  caught off guard, so EnergyLogic will continue to gather information needed to submit for rebates just in case funds are discovered.

Protect Your MoneyThe program closed after qualifying 3,295 homes for a rebate, of which 50% were built by Builders EnergyLogic works with.  This represents $1.5 million in rebates dollars paid out to our Builder clients, and over 48 Decatherms and 1,050,000 kWh of energy savings achieved by the great work that you do.  Nice Job!

On December 11th, the 2015 Xcel New Homes Program will begin.  On that day and moving forward we will be able to enroll in the program any home that has received a rough inspection that includes full compliance with the Energy Star Thermal Enclosure checklist.  As always, this process will be seamless for Builders.  EnergyLogic’s dedicated staff enrolls the house with Xcel, collects the data, processes it, and then submits it to Xcel after each inspection. This ensures you receive your rebate in the timeliest manner.  Although this takes time, we have worked hard on our process to ensure that our Builder clients receive the lion’s share of rebates that are allocated on a first-come first-serve basis.

Program changes:

Blower Door TestIf you remember, in August of 2014 Xcel Energy changed the rebates for their new homes program. We anticipate that additional changes will occur in 2015 as more jurisdictions move to the 2012 or 2015 IECC. This is largely due to the difficulty of demonstrating energy savings above what local energy codes are achieving. We should have a better idea about how the 2015/2016 Xcel DSM plan is and how it will impact the New Homes Program toward the end of October. This is when we anticipate the program details will be filed with the Public Utility Commission.  In addition to these changes, Xcel is putting the program implementation/management out for re-bid, which undoubtedly will cause change. As soon as we understand what these changes mean to the program we will make you aware of them.

As a reminder, here is how the program is currently structured.  Homes must:

  • have gas delivery from Xcel Energy
  • have a HERS Index within the range for the specific rebate amount
  • fully comply with the ESv3 Thermal Enclosure Checklist

Final HERS Index for Rebate Eligibility

*ESv3 Certified Rebate Requirements – homes must:

  • be ENERGY STAR version 3 certified
  • have both Xcel gas and electric service
  • have an ENERGY STAR clothes washer, dishwasher, and refrigerator
  • have at least 20 CFL or LED light bulbs (or 100% of bulbs must be CFL or LED, if less than 20 total light fixtures)

**Note: Some jurisdictions impose stricter energy code requirements as the home becomes larger (Usually measured in sq. ft.). Any home that is required by the prevailing jurisdiction energy code to achieve a minimum baseline HERS Index of 60 or lower is not eligible to participate.

If you have any questions feel free to contact Robby Schwarz or Tracy Larson for details.

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Robby Schwarz
Principal, Builder Client Services
EnergyLogic, Inc.

 

EnergyLogic is Under Construction!

With growth comes change and we’re happy to announce some growth related changes within our organizational structure. Our Builder Services Division is expanding and made the following changes to better serve our clients and our employees.

We are proud to announce the following changes/additions to our organizational structure:

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Robby Schwarz- Principal Owner and Director of Builder Relations
Robby will continue as the face of EnergyLogic and the primary point of contact for the main offices of our Builder Clients.  With the additional support from the new manager and director positions, Robby will be able to make builder relations his primary focus as we strive to align our products and services with the needs of our clients in a way that creates value.

 

Rusty Buick
Rusty Buick- Manager of Builder Services
Rusty came to EnergyLogic in 2013 after more than two decades as an owner/operator of multiple construction and home performance businesses.  Rusty spent his first year and a half with EnergyLogic as an Energy Rater and DASH Software Development Team member.  With his strong business and construction background, Rusty will assume the important role of managing EnergyLogic’s day-to-day Builder Services operations.  One of his primary objectives will be ensuring consistency across our rating staff for each of the codes and programs we work in.

 

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Scott Doyle- Division Director, Field Services
Scott is an original EnergyLogic employee, having been with the company since its founding in 2006.  He has held several positions over the years including Energy Rater, Quality Assurance Designee, Primary Trainer, and most recently, Division Director of Energy Professional Services.  Scott brings a broad industry background to his new position, as well as in-depth experience across all of EnergyLogic’s services.  Scott will assume budgetary and other administrative responsibilities for the new Field Services Division, which now includes Builder, Homeowner, Commercial, and LEED Services.  Under the new organizational structure Scott’s focus will be to improve integration and resource allocation for all of EnergyLogic Field Services.

As always your support is everything, and providing you with better service is our goal.

 

Buy Local, Colorado Made!

It has come to my attention that there are a number of Colorado-based manufacturing facilities for the products used on a daily basis for the homes we build. Manufacturing that occurs in Colorado supports our Colorado economy while Modern residential windowcreating low-embodied energy products! Embodied energy is the sum of all the energy required to produce a product. In other words, embodied energy quantifies the amount of energy used to manufacture a product which then can be allocated to each individual piece. For example, the quantified embodied energy includes the energy to collect raw materials, manufacture, package, and ship a product. It is interesting to think about the impact we have in bolstering our industry, our local economy, and our state. Through conscious decisions to buy locally manufactured products for our homes, we support jobs in our communities, reduced energy use, and help create a better environment for all Coloradans. A few examples of locally manufactured building materials:

Applegate Insulation – Penrose, CO (Insulation)
Johns Manville – Denver, CO (Insulation
Montrose Forest Products aka Neiman Enterprises – Montrose, CO (pine beetle or blue stain lumber)
Alpen High Performance Products – Commerce City, CO (windows)

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Robby Schwarz
EnergyLogic, Inc.

RESNET® Energy Smart Builders Program Making Strides

RESNET_EnergySmart_Builder_Vertical_LogoThe RESNET Energy Smart Builder program is gaining traction with builders of all types.  This no cost program is simple and can be utilized by all builders who are receiving HERS® index scores for their homes. All a builder needs to do is be designated by RESNET as an Energy Smart Builder and to submit a Memorandum of Understanding with RESNET to have each home energy rated and to market each home’s HERS Index.

EnergyLogic will provide you with a HERS Index score for every home where we complete our inspections. Yes, any home, whether you are doing Energy Code compliance, Energy Star or just getting a performance inspection.  The HERS Index is the nationally recognized scoring system for measuring a home’s energy performance. Energy Smart is designed to leverage your home’s performance to increase sales and awareness of the great things you are doing.

Usefull information can be found at the following:

EnergyLogic’s staff of RESNET certified home energy raters are your link to this powerful marketing platform.  Please contact us with any questions.

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Robby Schwarz
Principle, Builder Client Services
EnergyLogic, Inc.