Why are Multiple Listing Service Ignoring “Green” Elements?

San Diego's Multiple Listing Service

When it comes to energy efficiency and "green" features in homes, there is a disconnect in the marketplace among consumers, real estate appraisers and the nation's realty sales systems called the Multiple Listing Services (MLS). Prospective buyers tell researchers that they place high priority on energy-saving and environmentally friendly components in houses.

The presence of high-efficiency systems in homes makes shoppers more interested in buying because it will save them more in the long run. But on the other hand, the vast majority of multiple listing services (MLS), that list homes for sale do not yet include "green fields" in their data search.  The bottomline is that sellers should really be able to let an agent know when their homes have green features and appliances and make sure they are listed on the MLS. 

Now here is the disconnect: while most new homes come with energy certifications and ratings, the overwhelming majority of resale homes do not. For shoppers and purchasers who prefer to save on energy outlays, there is often little information in the formal listing search data on the MLS systems to highlight houses with extensive green components. Of the 860 multiple listing services nationwide, only about 210 have gone "green." Though, there is an industry effort underway to "green the MLS" by including green fields as standard sections in MLS listings, adoption has been slow.

Green_Addendum-290x300Appraisers are also hampered by the lack of green fields in the Multiple Listing Service… When appraisers search for comps (recently sold comparable houses), they are often unable to readily distinguish those with significant energy-efficiency investments from ordinary energy guzzling homes. Worst yet, most appraisers do not have adequate, specific training in valuing high performance green fixtures and tend to ignore them or even undervalue them in their appraisal reports to the lenders. This hurts both sellers and buyers alike.

To help bridge the information gap, the country's largest appraisal professional group, the Appraisal Institute, recently released an updated "green addendum" that real estate agents and sellers can use to call attention to the energy-saving features of the home. Appraisers can attach the addendum to their standard appraisal reports as a way to justify additional value assigned to the house because of the cost-saving improvements. On a special note, given the fast-growing popularity of solar panels and arrays, is a special selection within the addendum that provides the appraiser access to an online tool – a "PV Value" – calculator that estimates the incremental value the photovoltaic installation adds to the property based on a discounted cash flow model.

Lucky for San Diego homeowners and buyers, we have implemented many "green" fields that allows Realtors to search for specific green elements.

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