Jan Green, a real estate agent with HomeSmart Elite Group in Scottsdale, Ariz., knows personally the transformative power of green improvements. Green retrofitted her 1970s Scottsdale home from an energy vampire into a Net Zero property with several years of renovations. But an appraiser may not appreciate the value add of these improvements.
“First, I added spray foam insulation under the roof, sealed the duct work and air registers, changed all the bulbs to LED lights, added sunscreens on the west side of the house and bought a 16 SEER Trane HVAC system and a Nest thermostat,” Green says. “That generated 71% in energy savings before I even installed my 14 solar panels.”
As a real estate agent, Green understands the value of these improvements and carefully documents every upgrade including energy efficient appliances, along with her utility bills. Her windows are relatively new, but she plans to install a heat pump water heater as her next upgrade.
“Every homeowner needs to know what they own with documents and data for themselves and for a potential appraisal,” she says.
Green, whose home was the first in Scottsdale to earn a Pearl Score, which measures a home’s performance on multiple metrics, recommends that all homeowners have their home certified with a Pearl Score or another verification such as a HERS (Home Energy Rating Score) rating to make it easier for appraisers to evaluate their home.
Homebuyers of every generation today are more concerned about long-term value and operating costs for a home than upfront cost, according to surveys by Green Builder Media’s COGNITION Smart Data. Rather than consider only their initial down payment, closing costs and mortgage payment, they look at the full cost of ownership, the resilience of a home, energy efficiency, water use, health and wellness features and more, which is why Green Builder Media is developing a new metric to evaluate a home. Instead of focusing on the price per square foot, homebuyers and owners will be able to compare the Value Per Square Foot for homes.
A prime consideration in the face of rising energy costs and shortages is energy efficiency. Nearly 90% of people responding to Green Builder Media’s COGNITION Smart Data surveys report that energy bills and savings are very important or important to their decisions around buying or remodeling a home.
Green Appraisals to Acknowledge True Value
While homeowners with energy efficient features in their homes benefit with lower utility bills and better comfort, the value of their energy investments doesn’t always show up in appraisals.
“That gap exists because in the past you only got a green appraisal if the homeowners and their listing agent were aware of a home’s energy efficient features and requested a green appraisal addendum to estimate the value of those features,” says Sandra Adomatis, CEO of Adomatis Appraisal Service in Punta Gorda, Fla., and author of Residential Green Valuation Tools for The Appraisal Institute, an association for appraisers. “In addition, most appraisers are not educated in the value of green features, so real estate agents, buyers or sellers need to ask the lender – who hires any appraiser – to specifically request an appraiser who’s taken classes in green appraisals.”
However, as of November 2, 2026, Fannie Mae and Freddie Mac will require all appraisers to use a new appraisal report (known as UAD 3.6), which includes a section specifically dedicated to energy efficient features.
“That section requires appraisers to look for energy efficient features, such as solar panels and energy efficient windows,” Adomatis says. “They will ask owners if a home has an energy rating, request documentation of utility bills and when specific features were installed and determine whether these features affect a home’s value.”
Still, that doesn’t mean every appraiser will be aware of green features in a home. First, not all appraisers have been educated about the value of green features. In addition, Green points out, if an appraiser isn’t sure about whether a house has invisible features such as extra insulation or energy efficient windows, they may check the box that says they don’t exist and move on to the next item on the list.
Consumers and Agents Role in Green Appraisals
Adomatis says that homeowners, especially sellers, need to be proactive to get the true value of their energy investments acknowledged.
“I added a timer on my electric water heater, upgraded my HVAC system and swapped to low-e windows,” she says. “My neighbors pay twice as much as I do in electric bills, but some of these upgrades are invisible. I kept all my receipts and, when I sell my house, I’ll ask for a trained green appraiser and provide them with all the information I have.”
While the AI Residential Green and Energy Efficient Addendum is not required now that all appraisal forms have an energy efficient section, Adomatis recommends that home sellers and builders or their real estate agents should fill out the form and provide documentation of upgrades to attach to the home listing and give to the appraiser.
“Lenders choose the appraiser – not the sellers or the buyers or the agents – but agents can request a green certified appraiser,” Green says. “The Appraisal Institute has a list of certified green appraisers that I can forward to a lender. As the listing agent, I can reject an appraiser the lender chooses and ask them to choose someone else if I see they hired someone without experience with solar panels or other green features.”
For buyers interested in green features, Adomatis suggests searching databases such as Pearl Score, RESNET Public Database and the Green Building Registry by address for information.
“If an appraiser is hired who’s not educated about green features and doesn’t add value to the property based on those features, buyers or sellers can request a reconsideration of the appraisal, but this can be difficult to have approved and can delay a settlement,” Green says.
Since a green appraisal can take extra time, particularly to get the data on solar panels or other information, it can take a little longer than a standard appraisal, Green says. She suggests that sellers offer to split the extra cost with a buyer, since buyers typically pay for the appraisal as part of their closing costs.
“From the buyer’s point of view, a green appraisal can help them understand the total cost of ownership, including their utility bills,” Green says. “Plus, if the buy a house for $600,000 and the appraisal comes in at $650,000 because of the green features, the buyer has another $50,000 in equity.”
Both buyers and sellers benefit from appraisals that acknowledge the value of green features, Adomatis said, because the amount buyers can borrow depends on the appraised value of a property.
“Buyers and sellers need to advocate for themselves and find an agent who will be their advocate to have energy efficient features included in an appraisal,” Adomatis says. “They need to communicate to lenders that these features are important and add value to homes, and they need to ask appraisers if they’ve taken classes to educate themselves about energy efficient features.”
7 Tips to Ensure Energy Upgrades are Valued
Steps homeowners and their real estate agents can take include:
Get third party verification. Obtain a Pearl Score or HERS rating to provide concrete proof of green features.
Document everything. Keep all receipts and permits for green upgrades and generate a list of green features even if they were in place before you bought the house.
Get details on solar systems. If you have solar panels, keep all the details on the panels, storage and savings to simplify information gathering.
Compare utility bills. Document the change in your utility from upgrades or ask your utility company for estimates of bills for comparable homes.
Complete a green appraisal addendum. The information on the addendum can be provided to real estate agents, potential buyers, lenders and appraisers.
Request a certified green appraiser. Ask your lender to hire an appraiser experienced with energy upgrades.
Track values of comparable homes. While appraisers choose the homes they use to compare values, an agent can provide information about similar nearby homes with and without certain features such as solar panels or an energy efficient heat pump to demonstrate value.
Green Appraisal Resources
Green Building Registry - Largest single database of single unit homes, apartments and condos, some of which include a downloadable Appraisal Institute Residential Green and Energy Efficient Addendum.
Pearl Score – a database with a rating for every single-family home in the U.S. that measures safety, comfort, operations, resilience and energy.
RESNET Public Database - Free database that discloses the HERS Energy Rating on homes from 2013 - to date.
AI Residential Green and Energy Efficient Addendum – A form developed by The Appraisal Institute that can be completed by builders, contractors, homeowners and third party verifiers, such as energy raters, can complete this form to provide to appraisers, real estate agents, lenders and homeowners, and attach to a home listing.
RESNET Appraiser Portal - Free to all appraisers