Form 820-05
If you’re currently trying to sell your home or you’re doing some research as preparation for selling, one of the best pieces of advice we can provide is to surround yourself with passionate and reliable professionals. With the right realtor or listing agent, they’ll take significant amounts of the burden from your shoulders. Rather than sorting everything yourself, while also trying to work and continue your life as normal, they’ll take charge of the process and you can just concentrate on the more important matters.
For high-performing homes and those with energy-efficiency upgrades, your listing agent has a very important role not just for relieving your pressure but also for increasing the value of your home. We’re going to discover exactly why this is the case today!
Form 820-05
With energy improvements such as solar panels becoming so common these days, the industry has had to adjust and it has done so by introducing form 820-05. If you haven’t heard of or seen this document previously, it’s essentially a list of all improvements that have been made to a home (with regards to energy). For the appraiser, this document is incredibly helpful because they can see all the upgrades you’ve made all in one place. Not only can they see the upgrades, they can see all related information such as cost, age, etc. This could include;
Low-flow toilets, faucets, and shower heads
Solar panels
Energy-efficient windows and doors
High-quality insulation (all over the home)
Energy Star appliances
With all of these energy upgrades combined, you’ll see the greatest impact on the value of the home. Thanks to the document, the appraiser can see them all together rather than having to look around the home and potentially missing them. Why risk their vigilance when you can provide them with all the information they need instead?
If your listing agent creates this form, it becomes a roadmap to a higher listing price and it also allows for a successful close.
Energy Upgrades in the Home
The more upgrades you have in the home, the higher the valuation is likely to be. This being said, you should be aware of the market cap because the price won’t keep rising endlessly. In Phoenix, we can expect between $1.50 and $2.25 to be added to a home’s value per watt installed on the roof of the property. In general terms, experts believe few will go beyond an additional 15% for energy improvements.
In Arizona, we have fairly respectable utility bills which means that energy upgrades don’t have the same impact as they do in other areas. If we use California as an example, their rates are much higher so energy upgrades become more beneficial to new owners; the difference they see in utility bills will be significant. With this in mind, energy improvements have a larger impact on the valuation.
Conclusion
If you haven’t already, have a conversation with your listing agent regarding form 820-05. With this simple document, the appraiser has all the information they need to provide an accurate valuation and your investment in energy upgrades will all be worthwhile!
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