Connecting the Dots: Real Estate and Home Performance

A new type of conversation between REALTORS® and their clients is changing the real estate industry before our eyes. As homebuyers browse Zillow listings and spend their Sundays visiting open houses, their agents are educating them to evaluate not just curb appeal and square footage, but also utility bill costs, comfort, and health. And homebuyers are listening.

In fact, 56 percent of REALTORS® say that their clients are at least somewhat interested in sustainability practices, and 61 percent of REALTORS® say they are comfortable answering clients’ questions about home performance. That’s from the REALTORS® and Sustainability 2017 Report, published in April by the National Association of REALTORS® (NAR). The report surveyed REALTORS® nationwide and found that professionals recognize that their industry is changing: Consumer demand is growing quickly for greener, healthier, and more resource and energy efficient homes, and being versed in green building fundamentals and energy efficiency upgrades is essential to being a successful agent.

REALTORS® don’t need to get BPI certifications, but they do need training to learn how to recognize smart opportunities. For example, that a green-certified home (GreenPoint Rated, LEED, etc.) or a home with low utility bills is likely to sell faster and sell for more—and that these features should be played up in a listing. Or that even middle-income buyers can take a fixer-upper with no insulation and an ancient furnace and transform it into a green performer, leveraging utility rebate programs and smart financing like FHA’s Energy Efficient Mortgage or Fannie Mae’s Homestyle Energy Loan. The bottom line: Today’s real estate pros need to be able to speak intelligently about the importance of energy efficiency and home performance, and how it affects the true cost of home ownership, comfort, health, ROI and resale value.

NAR recognizes this reality and that’s why the Sustainability 2017 Report is the first of what will be an annual benchmarking survey of its national membership. The annual survey will track a broad range of topics: agents’ insights into client needs, their ability to help clients with energy efficiency and sustainability, and the percentage of agents who have helped clients buy or sell a “green” property. The fact that in 2017 more than half of REALTORS® nationwide claim their clients have an interest in a greener home and community shows how sustainability has gone mainstream. What lags behind is the number of high-performance homes they encounter: In 2017, only 27 percent of agents said they were involved in one to five transactions with a property that had bona fide green features, a modest number with room for growth.

But in California the green real estate trend is on a fast track. Over the past five years, the nonprofit Build It Green has trained more than 1,200 California real estate professionals and helped them earn the NAR Green Designation certification. This two-day training teaches them everything from green building fundamentals to the landscape of energy rebates and financing, to using their green knowledge to market themselves and win new clients.

A crucial next step for these green-certified agents is to develop relationships with the right contractors. Agents are the trusted advisors to their homebuyer and seller clients. They connect them to a network of home professionals, from lenders and home inspectors to electricians and plumbers. Today, an agent’s network needs to include raters, green lenders, and home performance and HVAC contractors.

REALTORS® and contractors need to recognize that point of sale is an incredible opportunity to complete energy upgrades and bring a new level of investment in residential energy efficiency. Industry thought leaders like the nonprofits Elevate Energy and Build It Green lay out a vision for a “virtuous cycle” of green real estate investment. The cycle starts as a conversation between REALTOR and client, which leads to a referral to a contractor and then a whole-house upgrade. When that project is documented with a Home Energy Score or another score or green label, that data can be reflected in an MLS listing when the house eventually goes up for sale again. Consumer demand for an energy-saving home will fetch a higher selling price, and eventually more homeowners and home sellers will recognize the ROI of energy efficiency, driving further investments in energy upgrades.

As the NAR Sustainability Report makes clear, this virtuous cycle is starting to spin.

 

John Shipman (pictured above) is Senior Director of Real Estate Services at Build It Green. He is a licensed REALTOR® and sustainability educator who has trained more than 1,000 real estate professionals in green real estate and green building fundamentals. In 2014, the National Association of REALTORS® awarded him with its national Evergreen Award and named him its NAR Green Instructor of the Year.

This blog originally appeared on www.homeenergy.org

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Comment by Jan Green on May 15, 2017 at 12:45pm

Agreed Will!  I've been swimming upstream in the real estate community for the last 9 years promoting all that you mention in my industry.  As a volunteer, instructor, and board member.  Major industry initiatives are taking place currently.  The appraisal institute has a designated spot for appraisers with green education that can be found at appraisalinstitute.org (education tab, green building); DOE just funded a solar course that comes out this month by the National Association of Reators; RESNET now shares HERS rating data to the Appraisal Institute; and much more.  It's a slow albatross but is gaining traction.  You don't about it unless you are involved.  I'd encourage everyone here who hasn't volunteered in an organization to get involved.  Doing that for the last 9 years has helped me to help my clients!

Comment by Will johnson on May 15, 2017 at 12:30pm

Lots of issues need to be embraced to really propel energy efficiency, sustainability & solar into the real estate practice.  Elevating realtors/lenders to incorporate utility cost evaluation in financing eligibility.  Appraiser reluctance to incorporate EE improvements and solar. Home inspectors lack of leadership to incorporate EE into the home inspection process.  More leadership from utilities and realtor associations are needed to provide more education and outreach.  

Comment by Jan Green on May 15, 2017 at 12:24pm

It's too bad that your experience wasn't what it should have been when selling your Father's home.  If you are looking for a real estate with experience in buying and selling homes with these features, make sure to visit www.ecobroker.com and www.greenresourcecouncil.org for a list by state of agents with this training. It's vital when selling as you could be leaving money on the table for homes with special features.  The process of selling these homes is different and there are added steps that not every agent understands.  Best of luck going forward. 

And in Canada, there are agents with this training. I've spoken to them! 

Comment by David Eakin on May 15, 2017 at 12:03pm

Not in my observation in PA. My son-in-law is a realtor and this subject has not come up once when he's discussing different properties in the Philadelphia area. We just recently settled my father's house (built in the '60s) where he and I did some extensive energy saving projects a couple years ago - not even mentioned by the selling agent; not even asked by the buyers' agent. I see this as a rolling trend: first in CA, then moving Eastward to Northern New York/New England, then back West to CO. But not much in mainstream East Coast yet. Nor in the SouthEast states from what I see in other's blogs. Way too much emphasis on increasing profit margins for builders/developers and "affordable prices" or "desirable features" for buyers. Some notable efforts by a few individuals, but not anywhere near mainstream. No real thought for long-term total cost of ownership or consistent comfort.

Comment by Victor Rols Lindsay on May 12, 2017 at 10:07pm

Why don't we do this in Canada??

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