"Green Homes Face a Red Light"

Hello All,
I saw this article on CNN Money regarding appraisal difficulties for green home projects. Real estate appraisals are a tricky business because the appraiser can only appraise something based on the demand of the market. So if you plan on putting a 100,000 dollar PV system on your roof the appraiser might only appraise that for 50,000 dollars based on the demand in the particular area. So if you need to borrow 500,000 for your house and the appraiser will only value your PV system for 50,000 the bank will only approve a 450,000 loan. So if you need to come up with 20 percent down to avoid PMI (Private Mortgage Insurance) or a second "piggyback" mortgage you will have to come up with 140,000 dollars cash for the bank. If the PV was given a full appraisal for its value of 100,000 dollars than you would only have to come up with 100,000 dollars for the 500,000 dollar loan. (Sorry if that was confusing, real estate is that confusing) Some areas of the country though are not as affected, apparently in Seattle green homes carry the premium that they deserve. The article though describes that green homes just need more time for people to value them which would in turn drive up demand for green systems. Many developers and builders though will not incorporate intensive green systems until the current trend starts to demand green homes.

-Nick

http://money.cnn.com/2010/03/10/real_estate/green_homes_redlight/index.htm