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Capturing Energy Upgrades in the Real Estate Transaction

Because green building techniques and products may impact the value of a home, they also affect the appraisal process when it comes to valuing residential properties. With the Cost Approach, the use of green features may increase the energy efficiency of a home but may add to the cost of that home’s reproduction or replacement. Appraisers employing the Cost Approach should look at how green features impact energy savings; how long a green product will last before it loses value; and if the use of green products (such as solar panels) detract from the curb appeal of the property.