North Carolina Energy Code Training for Appraisers in Boone, NC

NC Appraisers, you do not want to miss this timely continuing education workshop on the state's energy code Friday, July 25th.

Real estate appraisers are responsible for evaluating the value of a property and facilitating the financing opportunities available to buyers based on this valuation. Homes that are built to the 2012 NC Energy Code are more energy efficient – they save the property owner money in heating and cooling expenses, and provide a safer and healthier environment to live in. It is crucial that the appraised value of properties that are built to the code reflect these benefits.

This course will provide an overview of the 2012 NC Energy Code as it applies to residential buildings and the implications it has for appraisers. Appraisers will gain an understanding of these principles so that they can confidently and credibly determine the value of buildings built to NC’s strengthened energy code. Topics covered will include:

• Key provisions of the NC 2012 Energy Code
• How does the Energy Code impact the home?
• Current trends in the market including; the HERS rating system, “Green the MLS” efforts, & the Appraisal Institute’s “Residential Green and Energy Efficient Addendum”
• How to recognize the value of buildings built to, or above, the 2012 NC Energy Code

Appraisers will receive 4 hours of continuing education credits. Click here for more information and to register now!

North Carolina Energy Code Trainings in Boone, NC

The NC 2012 Energy Code, adopted from the 2009 IECC, was introduced to NC in March of 2012. This new code has proven to be good for NC’s economy and offer benefits to NC consumers and business owners. The Appalachian Energy Center and the North Carolina Energy Efficiency Alliance are hosting 3 workshops on the North Carolina Energy Code in Boone, NC. These trainings will explore the new and changing provisions of this new code.

Join us to learn about compliance methods, duct testing, duct sealing, system controls, building mechanical systems, insulation and fenestration requirements and other key elements of this great new code. Click on the links provided to learn more.

▪ April 11 : 2012 NC Energy Code Training, http://energy.appstate.edu/workshops/258
Learn the important changes in the residential and commercial energy code for buildings, how it will affect building design in North Carolina and results in substantial energy savings.
Continuing Education Credits: 7 LU|HSW, 4 BPI, 7 PDH, NCDOI CE 7 Building OR 3 Mechanical, 7 NATE

▪ May 2 : NC 2012 Commercial Energy Code Training, http://energy.appstate.edu/workshops/343
This workshop will provide an in-depth look at the NC 2012 Commercial Energy Code, various pathways to compliance, system controls, the intent and other energy saving strategies.
Continuing Education Credits: 6 LU|HSW, 6 PDH, NCDOI CE 6 Building OR 6 Mechanical, 6 NATE, GBCI 6 hours

▪ June 27 : NC 2012 Residential Energy Code Training, http://energy.appstate.edu/workshops/344
This workshop will provide an in-depth look at the 2012 NC Residential Energy Code, different strategies to show compliance, and a review of building science.
Continuing Education Credits: 6 LU|HSW, 6 PDH, NCDOI CE 6 Building OR 6 Mechanical, 6 NATE

• Gain your continuing education credits
• Register early to SAVE $50
• Understand the changes and be prepared to implement them

If you have any questions, please contact Janet Miller, millerjm1@appstate.edu, 828.262.8913 or visit the links above for more information.

A special Thanks to USGBC NC Chapter for supporting the
NC 2012 Commercial Energy Code Workshop!

Putting the HERS Score into Perspective: Using a Home's Energy Rating to Determine Added Value

 written by Dr. Lee Ball

One of the barriers to the widespread adoption of high performance building practices is the lack of quantifiable data that can be used to demonstrate added value to residential appraisals. Our last blog discussed numerous approaches to green home appraisal methods. This blog will discuss how a home’s energy rating can be used to determine increased value.  The Home Energy Rating System (HERS) Index is the industry standard by which a home’s energy efficiency is measured (www.resnet.us).

A typical resale home has a HERS score of 130. This may vary somewhat depending on climate zone and the type of HVAC systems in a home. The original HERS national reference standard new home had a HERS score of 100 based on the 2006 International Energy Conservation Code (IECC), but this changed after the 2009 IECC was passed. Today the standard reference home has a HERS score of around 85. After the passing of the 2012 North Carolina Energy Conservation Code,   a new home’s HERS score in the Tarheel state is around 82. A typical ENERGY STAR Version 3 home can have a HERS score anywhere between 60 -70 depending on HVAC types and climate zone. Finally to make things even more confusing, a home built to the North Carolina High Efficiency Residential Option (HERO) code, which is an optional part of the 2012 North Carolina Energy Conservation Code, will have a HERS score somewhere around 78.

Figure 1: NC and Surrounding States Issued a HERS Score in 2013

Now with all of that said, what in the heck does it mean? Are we comparing apples to apples or are we comparing apples to oranges? Originally when the index first emerged, we used the 2006 IECC reference new home with the HERS 100 score to demonstrate that it was 30% more efficient than the standard existing home with a score of 130, and a home with an 85 HERS score was 15% more efficient that the reference home with a score of 100. One thing is for certain, the lower the HERS score the better.  Many in the industry visualize a net zero energy target with a HERS score of “0” to be the eventual goal. However, in order to accomplish this one must almost certainly use some type of renewable energy such as photovoltaics (PV). In the meantime, we are seeing builders achieve HERS scores in the 40’s, 50’s, and even the 30’s. These low numbers can only be achieved by thoughtful attention to detailed insulation and air sealing, an integrated design approach, and very efficient HVAC systems.

So, how can we use this information to demonstrate added value on an appraisal? We have seen people use a home’s score in formulas they have derived in an attempt to quality energy savings compared to typical comps built to code, but a more accurate method is to reference the Energy Cost and Feature Report that the Residential Energy Analysis and Rating Software (REM/Rate) provides. REM/Rate is what energy raters use to generate a home’s HERS score in the first place. The Energy Cost and Feature Report  summarizes the annual utility costs that take into account heating, cooling, water heating, lights, appliance costs and the major energy design features of the home.  The report also gives monthly savings compared to the HERS 100 2006 IECC reference home. These numbers can be used by appraisers to quantify total annual energy costs and/or monthly savings compared to other standard code built homes. The Appraisal Institute’s Residential Green and Energy Efficient Addendum (http://www.appraisalinstitute.org/assets/1/7/ai-residential-green-energy-effecient-addendum-2.pdf) also includes line items for this information. Residential Energy Services Network (RESNET) is currently working with the Appraisal Institute to streamline the process of populating the data on the Residential Green and Energy Efficient Addendum by integrating it into the REM/Rate software package.

Building professionals can help this process by getting this information into the hands of the appraiser. This can be accomplished by including it on the MLS, by actually giving it to the appraiser, and through more education. Our next blog will highlight high performance building market data in North Carolina and its surrounding states.

The Latest in Green Home Appraising Methods

 written by Dr. Lee Ball

Appraising “green” homes can be complicated and confusing, especially if you are not sure what supposedly makes them green. Many homes built in North Carolina in 2013 had some type of green feature. In fact, North Carolina leads the nation in green building in terms of volume (http://www.homeinnovation.com/about/blog/a_year_in_review_for_ngbs). As a result, residential appraisers need to study the market and get green appraisal training in order to legitimize their competency as this market trend continues, especially since the market data drives the adjustment process. The process of making adjustments to homes with green features or certifications may require an approach that the residential appraiser is not accustomed to.

The sales comparison approach or paired sales analysis is not reliable in some markets due to the lack of available data. This requires the appraiser to use other methods such as the cost and income approaches in order to provide evidence for adjustments related to green building features. Fortunately, there are numerous resources available to the appraiser.  For the cost approach to making adjustments, appraisers can reference the Marshall and Swift Green Building Cost Supplement or RS Means Green Building: Project Planning & Estimating, 2nd Edition in order to accurately estimate the cost of certain features (http://www.rsmeans.com/bookstore/detail.asp?sku=67338A).

The income approach can be used by calculating annual operating expenses which are usually much lower in residential properties with energy efficient or green building certifications or features.   Reduced operating expenses or monthly/annual savings are examples of quantifiable “positive cash flow” which benefit homeowners on the day they move in. Monthly utility savings can also be calculated into a contributory value by using the present value of the annual energy savings, the mortgage interest rate, and the anticipated life of the savings (http://www.appraisalinstitute.org/library/bok/highperformance.pdf). Contributory value can also be calculated by multiplying monthly energy savings and the property’s gross rent multiplier.

Other methods include using market data such as the McGraw HillSmart Market Report 2012 which stated that the added cost to build a green home was approximately 7% above the cost to build a conventional home.

Our next blog will focus on how to use a home’s HERS score to demonstrate added value.

The NC Energy Efficiency Alliance is proud to offer CE training for Appraisers seeking knowledge of this subject matter. Please contact us for more information and to book trainings.

References:

1.          http://adomatis.wordpress.com/2013/03/12/appraisal-institute-green-and-energy-efficient-addendum-update/
2. http://www.appraisalinstitute.org/education/green/default.aspx
3. http://www.appraisalinstitute.org/library/bok/highperformance.pdf