Given our interests and passions, it probably comes as no surprise that Luis and I have some friends with very unique homes. We have friends with elaborate passive solar systems, solar hot water systems, geo-thermal heating systems, wind turbines, photovoltaic panels, straw bale adobe construction, thermal mass for cooling, and other green elements that add value and comfort to a home.
These elements occasionally make it more difficult for our friends to obtain accurate appraisals when doing simple things like taking advantage of the current interest rates and refinancing their homes.
Recently, I was chatting with one friend about her refinance process. She was very frustrated because the bank was denying their refinance because the appraisal had adjustments outside of the banks allowable percentages. It was doubly frustrating for her because the bank chose the appraiser and ordered the appraisal, but wouldn’t accept the appraisal while my friend still had to pay for it. As we chatted about it, one thing led to another, and she ended up sharing a copy of the appraisal with me.
Now, I’m not an appraiser, but in my job, I’ve seen my way around more than a few of these forms. After letting her know that one thing she was questioning the appraisal on was actually the proper protocol, I was closing the form when I noticed the line the dealt with Energy Efficient Items was blank. This was very odd since our friends have a pretty new solar hot water heating system in addition to many other energy efficient elements in their home. I mentioned it to my friend, and she responded that while she had pointed it out to the appraiser, the appraiser had completely ignored these items.
It is very important to have a green home appraised by someone who is familiar with green building system and how to properly assess the value of green improvements. If you are purchasing a green home or refinancing one, talk with your bank about which appraiser they are using and initiate a discussion on the familiarity of the appraiser with energy efficient homes.
Regardless of whether your home has unique characteristics or not, it is always important to carefully review the appraisal once you receive it. If you have any concerns on the accuracy of it, discuss this with your lender. Most lenders do have a form you can complete to formally address concerns and question the accuracy of an appraisal. Our friends are now filing that form with their lender to request an adjustment to their appraisal. A positive value attached to their energy efficient items could bring the adjustment percentages into the bank’s parameters and allow their refinance to proceed.
Be an active partner in your home financing process.The PV panels and the wind turbine featured in this post were photographed by Brenda here in Green County. There are many homes with green elements here if one knows where to look.
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Brenda was very helpful with finding out all the details.— Mary Carroll
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