Anyone out here building net zero specs or customs, if so how are you getting the appraised value of the energy savings?

We aren't. Appraisers agree that the cost portion of the appraisal meets their requirements - in other words, they agree that our house cost is accurate; the problem comes in finding "comps" - comparing the cost of this house to the existing houses that have been sold. They're aren't any, so they don't "comp".

The energy savings benefit shows up in the required monthly utility bill disclosure section that is in the real estate sale multiple listing service form. Buyers see how much lower their utility bill will be for the energy efficient home versus a code minimum home having the same square footage.

Having a utility bill in the MLS means nothing unless an appraiser/bank uses it as cash flow to qualify the applicant, and, the utility saving has to weighted to the cost to get there over some life cycle. Conforming loans or EEM don't do this, nor does VA/FHA properly. To get the utility bill takes tools and training by the Appraisal Institute for Green and Sustainable Buildings, or AGREEA (addendum), or PV Value based on annualized cost, HERs (ERI as of 2015 IECC that includes air sealing). To get to proper net zero or positive takes "solid" lots of Engineering most builders can't do or afford to hire out. Those that are doing it are DIYs or cash transactions with $$$$ to burn more than likely with negative equity they find out when they cannot get the valuations when they go to sell.

Green, COP, this, that, and the other, when most have no idea what the "real" value of it is.

To make matters worse "Green Money Lenders" that don't understand the Engineering are coming up with their own valuation tools vs DOE, usually solely based on HERs that can be misleading or most don't understand, that is all over the place Lenders are doing and training appraisers right, wrong, or indifferent, paying them more to "see things their way". Now we have ERI to confuse matters more and 2015 IECC... "Value Added Engineering......Imagine that, lol! Entertaining to say the least

Hats off to anyone that sells net zero production specs for a 10% profit moreless 20 ....

Here is what I suggest to the industry stop using the term "COP" when you cannot quantity in $$$ what it means to the sales value of a green home.

My guess is that anyone buying a new house that doesn't "comp" would need to pay a higher down payment to cover the bank's perceived risk. After a year+ of utility bills, a financial argument for increased value would then be easier to make (although many may not accept it).

A local home owner was recently selling all his solar panels - because the new buyer of his home wasn't willing to pay much for them.

You got it, how green energy skillsets are making a living on one-offs is beyond me. Green Energy Money a regional lender told me they move millions every year in net zero customs based on HERs, said builders are making a profit of around 20%: http://www.greenenergy.money/pilot-program/
Not sure I believe the profit although they said most are design-build. They may not be accounting for design cost right. I could agree once a spec was designed and optimized, not sure I'm getting the whole story from this lender. It takes massive amounts of time to get an entire local green infrastructure on board and trained. In my mind there is an up front loss in hope of capturing a small market that grows fast. These Green lenders only do perms, the reach out to local banks/appraisers to do construction loans and share in my frustrations.

They use HERs which compares the design to 2006 IECC is outdated replaced by 2015 ERI that compares the thermal envelope to 2009 and ACH to now mandated in 2015. Even if you use ERI it's to code min and would not value a home that succeeds it, by doing so may be throwing $$$ in the trash depending if you get to net zero using code min and solar and if your build COP is optimized to retail sales or MLS. 2015 I believe also uses u/shgc ranges for smart windows. My 2009 at best comparable home here has an ERI close to 110 failing miserable mainly due to lack of air sealing & low insulation , mine at 54 which is code min. With 4 kw PV 23.2. My ERI is tied to a higher initial cost of ~$5000 that yields a $60/mo utility saving. The $5000 is determined by looking at component design COP using present and future value that also needs to include market demand(what people are willing to pay for, ie_ HR heat or forced air, etc, it's like what sells higher another bathroom of bigger kitchen as related to energy choices)....When annualized yields a cash flow depending on interest rate, taxes, etc....To get to net zero $15,000 initial cost PV, annualized... See how misleading using HERs is & we have not got in the value of IAQ and comfort.

If Trump kills some of the EE programs like DOEs it may make matters worse. All the massive info & tools on USDOEs website is under utilized, obviously is not working and for the most part a waste of tax dollars I hope Trump does something about. We don't need massive amounts of reading material scaring and confusing people. We need liaisons to come and work with jurisdictions and infrastructure to boost sales, give appraiser some incentive.....I don't think $250 to take lenders training that is not even accurate is the answer.

I got turned down yesterday for a 75% LTV portfolio construction loan since the loan officer made the decision for the bank it was too "relatively new " and 25% down was not enough. If you can past these idiots your on your way. There is a huge opportunity here they don't understand, especially with solar financing.

Here is what the DOE tells lenders: http://solaroutreach.org/wp-content/uploads/2013/11/Local-Lending-for-Solar-PV-Final-Feb-2014.pdf
If you can even get them to read it.

Today I'm waiting for another that did not know reaching out to corporate for appraisal experience since they lend in 38 states. Like I said you spend massive amounts of time on educating infrastructure. I'm beginning to think they only way to put a highly profitable net zero spec on the ground is with your own cash, out of reach for most. Put a model on the ground hold it for about a year. Market like crazy and hold on to your seat :)

I don't think too many people need a bank loan for building their custom or energy efficient home. The masses who need bank loans tend to purchase the cheaper code minimum track homes or condominiums. There is no question that there are people who exceed the point of diminishing returns when it comes to energy efficiency approaches and who will never realize a positive ROI. Typically, these people don't take the time to accomplish the ROI analysis or have so much money that they simply don't care. So clearly the energy efficiency market is largely currently targeted toward the well off and I don't see that trend changing anytime soon...it takes money to make more money or to save money. DIY is about the only affordable way for the masses to participate. Unfortunately, I suspect that the inequality between the well off and the masses will only increase more in the coming years until a revolution point is reached...or at least that is what history should have taught us.

Most of my clients are people selling their (paid off) houses so they don't require loans. But a few have needed and gotten construction mortgages. It's a little PIA, but there is a demand from those interested in getting off fossil fuels.

Not correct, everyone's success in this market depends on the lending market, as soon as I can I'll explain why too busy right now dealing with stupid lenders. I don't think lower CO2 is enough, NASA proves that midwest the biggest concern small national concern at best, Trump will kill that thought . Alot of utility has moved to clean energy. Good luck getting your client on board with that. I'm baffled how most will do more research on their cell phones leaving their homes in the hands of what builders and agents say about home designs, not asking to talk to the design engineers before they spend $100's if not millions of $$$$...That needs to change most builders and DIY's should not be designing high performance homes. Most have no clue what they are doing period. If you go out to designer forums like Chief Architect or Autocad, Rivet, etc, anyone can buy a license $2-3K to design junk homes, anyone, not knowing what they are doing, or go to sites like GBA get free advice from retired ppl with nothing better to do than write meaningless blogs that have not put nothing as far as a net zero specs on the ground be happy to ill advise any DIY willing to listen that are only hurting themselves, since it is the spec builder that needs the most advise today anyway until Green Engineers are better valued. ENGINEERS NEED TO STOP EDUCATING DIYS AND SITEs LIKE THIS, YOU WORKED HARD TO GET WERE YOU'RE AT, HARDER THAN DIYS AND NON-DECREED BLOG WRITERS STOP SUPPORTING THEM FOR FREE! THE NEXT GEN OF ENGINEERS WILL VALUE THIS KNOWLEDGE you give away to their sponsored products to promote yourselves, our kids...IF you think you are promoting sales by doing so look at your sales from these sites and ask in the big picture what is the value of your free advice? Are you making money by being stupid, how much?

Well...as stated in the free DIY engineering calculator section of our website:

“Often times you have to do a project yourself to obtain the best value and achieve 100% personal satisfaction. We are do it yourself (DIY) minded at heart and we support like-minded people. We believe that being self-reliant and building energy efficient homes that use renewable energy resources in a responsible manner is a good philosophy for our planet. To this end, these calculators were developed to enable everyone who shares this philosophy an opportunity to accomplish this goal.”

So...for some of us...our motivation for assisting and sharing facts and data with this green building community has little to do with making money. Even though hate, ignorance and trickery may currently rule the day, the vast majority of people still value facts and data and doing the right thing. If making money is your only motivation, you would be well advised to hang out somewhere else.

Inaccurate again, this is a safe guess 98% of builders and DIYs out there are in it to make money. If the builders don't or 'hang out somewhere else" the industry drops out. Alot of jurisdictions won't mandate all of 2015 IECC in fear it bankrupts builders and it probably would. Code is ahead of the slow moving market and it's already a year old. Most never heard of HERS moreless ERI, for example.

Some of the problem is appraisals and the lending institutions. That is a well know fact that and why USDOE is trying to do something about it but it is not working. The spec home builder needs to be the center of support here, not one-off DIYs or customs or the industry won't grow. Right now we have sites I already mention that are focused on the DIY hoping to promote sponsored sales even if they are wrong for the design to make money. You are correct DIYs should hang out some where else, but then again, they come to these sites to get free advice so they don't have to pay Engineers, OR, they cannot find local experts since these sites promoting ill advise are ruining their marketplace. I tell this story all over my website, to not take free advice off the internet, you get what you pay for.

IAQ ventilation requirements are vague and ambiguous as a result lawsuits are already well underway. The Sick Building Syndrome is growing rapidly and the only ones making money on it is the IAQ Analyst. Sorry, just not that simple and best not left in the hands of average persons. It has been at the point where good Green Engineers are needed with a background in chemistry and physics to start. In parts of Germany and world our US Engineers only qualify as GCs, PHDs do design. Many of our Architects don't understand building science so DIYs go to the net where they dont always get the right advice. Putting an infant in most homes with IAQ 3-4 times worse(statistically proven) than the outdoors is not right. What needs to happen is all homes need to be tested at completion and the homeowner should be given an owners manual. Below is a good read on smart IAQ meters that are being tied to auto ventilation, temperature, and relative humidity controls. This industry needs to grow, make money. They should be part of industry standards especially as air sealing requirements are on the rise. If you don't see a tie to tested IAQ by any "advisior" passive builder, etc, run for the hills! Health is the #1 concern not energy or lower utility bills. ASHRAE 62.2 is a start, last thing we need is tons of debates and unfounded internet sales hype for the specific home, yes they are all specific generals rules of thumb don't work in high performance building's period. Here good reads from AVI on that: http://hvi.org/publications/pdfs/IndoorAirQualityandMoldPrevention.pdf http://hvi.org/publications/pdfs/JohnOullette_08Comfortech.pdf

Within 1-2 days a home can be sick right before a newly wed couple with infants moves in from a bad design or advise, you cannot see it. Mold is classified by the amount of water it takes for growth, put the wrong vapor manager in the wrong location without the proper tool and knowledge is a recipe for disaster potentially costing major health issues. Any good engineer knows and should advise that tools are only as good as the user, trash in trash out. It's been that way for centuries and any good engineer should make anyone well aware of that. The best energy modeling tool in the US is NRELs BEOPT supported and funded well by USDOE and several labs and big fish industrial leaders. In it you'll find weather files for specific climate locations and lots of other variables that optimize design and cost. That IS the starting point for conversations. You won't find much support from "Internet Keystroke Advisors" on these tool since they rather disprove them and keep you coming back to their blogs/post, that fall far short of being able to handle the amount of data needed) Free advise (and we all know what that is usually worth) cannot replace these models, it takes a learning curve and skillset. For vapor management WUFI is the best, there is a free version of it too on their website or goggle PHIUS. Both these tools are back calibrated by decades of tested field results that is made public on their websites. Other than that the USDOE has mounds of credible proven tools and info for the DIY. Of course, as I said trash in trash out only as good as the person trying to understand or use. More than likely, if you have not been trained in Engineering and Science you should hire a pro. WUFI will tell you this, they have pro level software as well for purchase. Fluid modeling is an industry standard in just about any product that interfaces to weather. Nothing new, not debatable, already proven!

That is the minimum any DIY should use and verify, be careful of anything less. Also, don't think for a second anyone that spends massive amounts of time on the internet pointing to or promoting their site is doing it free. Most can see right through that sales hype. IF they were their business would be invisible.

http://energysmartohio.com/blog/which-indoor-air-quality-monitors-are-best-and-why
Uhoo us another due to be released next year.

Here I'll share a correspondence with a bank I received last Friday and my response, this is from the loan officer that handles commercial lending.... Yesterday, I made an educational video of my 3D design and energy model showing utility bills, CO2, etc and write up just for banks and agents to get them on the same page as me

Lender: I wish you nothing but the best...I'm sure you'll have plenty of options for financing your spec...I just know my group...this wouldn't be something theyd have strong interest in.

Me:

Sounds like your “group” needs a wake-up call. When I and those like me succeed and we will, it will shut your new construction lending down. In case you all are not aware, 40% of CO2 omissions is from building’s. Why anyone would not have a “strong interest” for future generations says a lot about the institution. My home designs pollute our atmosphere 110% less than the average home.

FYI: A lot of the nation and parts of our state have mandated 2015 energy codes to design better building’s. We have no codes but are working on them, been well aware for quite some time that the federal government is going to mandate them here. The fear has been it will bankrupt most builders you probably fund and it probably would since it takes a costly Green Energy Engineer to design them right for profit. If Trump comes in here soon, does as he says and mandates 2015 energy codes in part or whole which is inevitable and just a matter of time, lenders and appraisers will be left with no choice. The ones most likely to succeed will be like me that are already there.

So, you see it is not just about qualifying me that is not a problem nor will it stand in my way, it’s about qualifying lenders and processes for my clients.

I can get my clients down to zero gas/electric & lower water utility bills which helps service the loan, saving homeowners $1200-$2000/yr annualized on average, over the course of 5-30 years occupancy adds up substantially. Why lenders would not want to fund a home that makes it easier to service their loans defy's logic. I can even get my clients "net positive" where they are selling utility back to the grid if it makes sense for profit. Next year companies will make the roof all solar(no more attaching panels) and the prices will keep falling drastically while utility bills go up every year 3-4% maybe more as we get people off the grids.

Let me know if you talk some sense into your group or if you know of a client wanting to lower or eliminate utility bills and live in a healthier home, please send them to my site.

I do customs too, they can get the loan or cash is always nice and makes things a lot easier.




Without an in depth understanding of the appraisal and lending processes a spec builder won't profit as they should grid locking the entire green industry. Again, the amount of upaid time spent here is enormous, add the loss to the higher cost of design and perhaps materials. We have not even got the training agents, sales, insurance, and the AHJs, HOAs, or failing with them or by not understanding the market with no comps and putting the home in the wrong location. The ones that are willing to take the time & risk are the ones that need the biggest praise and rewards. Actions speak louder than words. It's one thing to yap on the internet all day about green, another to actually put your own green into one of your designs and build one. I don't think you'll find many internet advisors do. It is easier for them to make money stroking keys and writing blogs and post, less risk of loosing lots of money if the home does not sell and it turns out there is no market like you thought or were led to believe.

Much of what you state is not untrue. However, you seem to have a hostile tone that personally turns me off. Good luck achieving your goals.

Where are you? I googled PARA HOMES and found a company in India and one apparently in Florida. The market for these homes varies around the country and around the world. What's true in your state and/or town may be very different in another location.

Saili-What I stated IS true and I'm obviously not here to turn you on. If that's what you're looking for perhaps it's you that needs to "find somewhere else to hang out" so sites like this can grow in the right direction which is not towards you....Of course people that use sites like this to point to and promote their site and blog writers for profit won't like the truth and try and find anyway they can to get their potential clients to ignore the truth which sometimes hurts.

It does not matter where I am at, I don't need to promote my business out here....how many blogs, post, or threads do you read about spec home builders are getting the proper appraisals and producing massive amounts of net zero specs? There is one market indicator and this thread supports that....

See this list of AIs that have taken the "Residential Valuation of Sustainable Building's" a two part course that trains in the green appraisal addendum(AGREEA) and PV Value (which are great tools for green buildings, nice work here) .
http://www.myappraisalinstitute.org/findappraiser/green_sustainability_residential.aspx

Drop down to some states and see how many if any can provide an accurate one to local banks. What I mean by "local" is FHA/VA, Freddie MAC, Fannie May that insure conforming loans require that the appraisal accurately values "the specific location and property type" meaning that even if you find some in your state they need to know the "specific location" (those truthful "specifics" I mentioned above to properly design green homes which the financial package is definitely part of successful sales). Now think about how many US jurisdictions there are that have none, billions. With no comps that is impossible so, these tools provide an analytical path for local appraisers to use IF they get trained AND, banks have an interest in also getting trained by DOE publications based on market demand. They won't spend the time and money getting trained if there is no market to profit from (that "truthful" $$$ thing again I mention above). You have to pay them more as most are doing or trying know clearly, like GEM does using there own programs since they can't find any either, and ones like them that will and have surfaced. Go ahead call all your local appraisers see if they will take the training or have done any builds what so ever and know what the profits margins are, since without the value of green building's being properly realized in the US there is NO WAY for the masses to profit, and that includes DIY, customs, specs. Anything less is internet sales hype and can potentially loose a homeowner lots of $$$$. It would make little sense for even a DIY to build one if they had no qualified appraiser since you never no when you may need to sell unless you have cash to burn which I don't think represents the mass populations or buyers in the world.

I'm done got better things to do. I'll answer my own question, Q: Anyone out here building net zero specs or customs, if so how are you getting the appraised value of the energy savings? A: None to very little, most are not getting the proper accurate appraisal to begin with.

Missing in this discussion: Why must green building be more expensive than standard operating procedure? OVE framing, using less wood and fewer pieces, reduces material costs and labor. It's been around since the 1970s. Reclaimed polyiso, except for the odd dinged corner, is just as good as the new stuff. The salvage companies tearing down barns and '50s houses sell far better wood than you'll find at a box store. Need I say that reuse is largely ignored here on a site supposedly dedicated to green building.

I recently met with a contractor adding a wing to my son's house. It is sort of green because his Boston suburb has higher efficiency requirements. Turns out he used reclaimed foam on his own remodel and knew outlets that sell it, plus ones that sell tile and plumbing overstock. He said he was happy to use it as long as we fetch it. He didn't do FPSF or OVE framing but he'd do the latter if I drew up a framing plan. (!?) He was unwilling to reduce his framing price for the simple reason that his framers would be scratching their heads and perhaps tearing down a wall and starting over.

Yes, construction lenders are hidebound. Sad to say, so are builders.

"Green Building" is a highly nebulous term - it can mean whatever you want it to mean. We build High Performance homes which are more expensive since we use more insulation, better windows and take much more time getting the details right. Using foam on a building - whether it's recycled or new is more expensive than using only OSb sheathing - due to the installation and sealing time. So saying that a tight, better-insulated-than-code house should cost the same as a code minimum house is nonsensical - who pays for the added labor and insulation and detailing?

It's not true that recycled foam is not mentioned at this website; Dana, for one, mentions it repeatedly, and he's not alone. It's also true that when used by for-profit builders (as opposed to DIY'ers) it is more expensive to install - it takes time to clean the stuff (often VERY dusty and dirty), cut out the bad parts and patch missing edges. It very well may save money in some cases, but it doesn't always.

My 1525 SF 2015+ IECC design cost about $5,000 more, my HVAC cost is around $6,000 half of the typical $12,000 built to 2009 IECC. $5,000 goes to high performance EE. I can bury that or swap remove cost from finish, etc, IF I think I can sell lower utility bills, IAQ, comfort in it's place...maybe? Conforming loans have 10% wiggle room no problem appraising there. PV at $10-15K to get to or close to a net zero there is the biggest issue, storage even more. It needs PV Value.

Heres another indicator these green homes are not moving well. What green means to appraisals is all that matters, and to clients/buyers. I train them on my site since most no clue. Add alternative materials they don't understand the value of makes it worse.

Another lender response this am. This one is at least trying. Lends in 36 states, reached out to corporate no help so far. Talked to my states only green appraiser that took the course but never did a home. I also called the President of my states AI, never took the courses worthless!

Lender: I was able to look into a little bit. I have actually spoken to James. He took the classes a couple years ago, but has yet to do a home like that. I've got some meetings and closings today. I'm going to to also touch base with lending side to see if we currently work with any banks that have done these types of homes before.

"It does not matter where I am at"
Most posters are open about who they are, where they are and what they do, unless they have good reason to hide that. Your answer speaks for itself.