Colorado Finance Summit: Elizabeth Million, Bank of America, MLS


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"Appraisal & Market Value, the MLS"

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Colorado Finance Summit: Elizabeth Million, Bank of America, MLS

  1. 1. Appraisal and Market Value, the MLS Elizabeth Million – Bank of America
  2. 2. Residential Energy Efficiency Working Group (REEWG) Appraisal Committee – MLS Improvement Recommendations
  3. 3. Who is the REEWG – Appraisal Committee Group? Residential Energy Efficiency Working Group (REEWG) Appraisal Committee – MLS Improvement Recommendations • The Appraisal Committee: a volunteer group, determining how to integrate new searchable fields into Colorado’s Multiple Listing Service’s (MLS); creating uniformity in “greening” our regional MLS’s. • Comprised of Real Estate Agents, Appraisers, Lenders, members of the Construction and Energy Efficiency Industries, and both IRES and Metrolist
  4. 4. What we are currently doing at REEWG – Appraisal Committee Group. • The new searchable MLS fields: • New MLS searchable fields are split into two categories, “Certifications” and “Features.” • It will provide the industry with needed energy and “green” data points • Quantify market value, and identify comparison data for the appraisal and lending industries. • Addendums lend more information on the green features of the home, as well as, help decipher between energy-efficient and regular homes.
  5. 5. How do we integrate “green” home features into the MLS and to what end? 1. Identify the “green” attributes of a home to be added as searchable fields in the MLS. 2. Distinguish between “green” features of a home and actual certifications. 3. Appraisers will determine if any of these features or certifications add value to the homes. 4. Lenders/underwriters will need to be convinced that there is added value. Even if appraisers find added value the lenders/underwriters who ordered the appraisal must also come to believe there is additional value.
  6. 6. Outreach Strategy to the Real Estate Community MLS bodies/providers Homebuilders Partners (ESNH, USGBC, Xcel, EcoBroker) Real estate professionals Appraisers
  7. 7. Getting the Information Out and Training the Real Estate Community • The Appraisal Committee, with the aid of the local HBAs, will obtain the email information of the associations Homebuilders to inform them of training opportunities (such as ENERGY STAR for New Homes trainings) and industry events will be utilized to promote MLS improvements. • Encourage homebuilders, through various websites, (such as Recharge Colorado, ENERGY STAR New Homes, Xcel Energy) to contact their real estate professional and list a new home using the improved MLS. • Real estate professionals will have training opportunities which include the Colorado Association of Realtors (CAR) convention, Ecobrokers, and ESNH. In addition, local Realtor boards will convey the green changes on the MLS. • Appraisers will be notified of training opportunities via local Realtor Boards, Appraisal Institute, and other local Appraisal organizations.
  8. 8. Training, Education, and Knowledge The webinar trainings will be offered to both real estate professionals and appraisers. 1. Understanding energy / green field improvements to MLS a) definitions of fields b) how to properly gather and enter data . c) how to utilize the energy / green features addendum 2. Searching the new MLS for real estate professionals and appraisers Trainings focus on tools for real estate professionals equipping them with valuable information on opportunities for their clients to make improvements to the home they are buying or selling. Ecobroker, the National Association of State Energy Officials (NASEO) and the Governor’s Energy Office (GEO), are currently partnering on developing trainings
  9. 9. • SAMPLE TRAINING OUTLINE: • I. Why do we need this in our MLS? – A. Consumer service – B. Valuation data – C. Full and accurate representation (liability reduction) • II. What is a “green” house, anyway? – A. Definitions – B. Characteristics – C. Examples • III. How can the seller or buyer or agent know? – A. Third party certifications – B. Hire an expert • IV. The best‐known certifications in Colorado – A. HERS Rating – B. Energy Star® Qualified new home – C. LEED for Homes – D. NAHB/NGBS‐ICC 700 – E. Other certifications • V. Features in fields and Features to highlight in text • VI. Resources
  10. 10. The age old question of what comes first………? The “Green/Sustainable/Energy Efficient Chicken…….or the Golden Egg?? OR “Retrofit“ Green/Sustainable/Energy Efficient Chicken Demand for Green/Sustainable/Energy Efficient Homes This is the million dollar question…?
  11. 11. “Green Value Chain” and Value Challenges with Green, Sustainable, Energy Efficient Homes Seller – need to document all green, sustainable, energy efficient features of the home Real Estate Agent – need to list green, sustainable, energy efficient features or certifications in the MLS Buyer – “purchase power” decision and willingness to pay for green, sustainable, energy efficient features of a home Appraiser - most important link in the value chain. Must have the market data to determine if there is value add to green, sustainable, energy efficient homes. Lender/Underwriter – decision maker for accepting appraised value and information provided by appraiser. Very important to provide quantifiable green data within the appraisal.
  13. 13. This is the story of a very green home……… “GREEN HOME” Knowledgeable Green Real Estate Agent Retrofit /New Construction list on MLS . The MLS must have Green home ready for sale!! Data Points! What’s a green loan?? Knowledgeable Green Buyer Broker Buyer makes application with lender Real Estate agent finds a buyer who for a green loan. Appraisal is ordered says “I want to buy a green house” – for the green home. now the green home is under contract
  14. 14. You gave how much value to the PV panels? Appraiser inspects the green home for green features & certifications – uses MLS to compare Lender/underwriter reviews appraisal to other homes that may or may not have green features. Lender/underwriter approves the loan!! Green Home is Sold!!
  15. 15. And they lived sustainably ever after….. Green/sustainable/energy efficient fairy