Home Performance and the Real Estate Market: A Perfect Match

If the home performance industry had an online dating profile, it would likely be looking for someone with a great network of friends that he could get to know. Home performance would also be looking for someone with a rich history (like himself), good looks that go beyond the surface, and someone who may be able to get some of his friends a job (hey, not everything in a relationship is about romance). Someone like the real estate market, for example. Unfortunately for home performance’s dating life, it seems that he hasn’t yet found the right matchmaker.

And I’m not the only one who thinks that home performance and real estate are perfect for each other. In fact, just last week, PG&E’s Pacific Energy Center in San Francisco, California held a course titled “Green Homes: Valuation and Financing for Realtors and Appraisers.” On my way to the full-day class, I was thinking about the relationship between the two industries. Although I had a hunch that realtors and appraisers weren’t as in tune with the green homes market as say our readers are, it wasn’t until I was actually sitting in the classroom that I truly realized the lack of connection the two had in the “real world.”

One of the presenters, Debra Little (of Debra Little Sustainable Design) approached the group of appraisers, agents, and realtors with this question: “How many of you have ever heard of a home performance contractor?” I was the only person that raised my hand. After I was excluded from participation, she asked, “How many of you have heard of Energy Upgrade California?” Not a single hand went up. Lastly, she asked, “How many of you have worked with or heard of an Energy Efficient Mortgage?” Not a single person.

Now, I know that this one classroom isn’t necessarily representative of the industry as a whole; however, it would seem that the people in attendance are ahead of the curve.

Honestly, I was impressed they were there. They had come to the professional realization that green homes were becoming more and more vital to their industry. They also likely were striving to fulfill the seemingly niche market that green home appraisals are in. In other words, they wanted to learn how to value eco-friendly upgrades and renovations so they could sell homes quickly and for more money. Makes sense to me.

Over the course of the day, we learned about energy efficient rebates, Energy Star appliances, energy efficient mortgages, green certifications, the leasing of solar panels, and even building science. We learned about energy benefits, and almost more importantly to homebuyers, non-energy benefits. Needless to say, the group came away with a ton of helpful information. What’s more is that we all learned a bit more about each other’s industries. It was the equivalent of a first date, of which was set up by the presenters at the Pacific Energy Center. (I imagined it going a little something like this: “Home performance, I’d like you to meet a friend of mine…I think you’ll really like her.”)

As Debra Little explained to me in a conversation during lunch, appraisers, realtors, and agents haven’t yet seen a lot of green homes on the market because the people that spend the money on energy efficient upgrades stay in their homes much longer. They’re comfortable and they pay less in utilities to keep it that way, so they’re not selling just yet. However, as energy efficiency gains mainstream traction, real estate professionals need to be able to understand the value of these upgrades and retrofits. Soon (hopefully), energy efficient homes won't be an exception, rather they'll be the rule. But for now, it's realtors, appraisers, and agents that stand in a prime position with homeowners. They have the numbers (roughly 3,000,000 people are in the real estate industry), and are constantly face-to-face with homeowners, giving them a wonderful opportunity to pass along the value of energy efficiency. This makes the real estate industry extremely important to home performance professionals. 

There’s no telling exactly when a second date will be but I have another hunch that this relationship is going to get pretty serious.

For more information on free classes at PG&E’s Pacific Energy Center, visit their website.

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Comment by Robert Ernst on May 24, 2012 at 8:25pm

I think the more people hear about something the more they believe it and want to participate. So if PG&E is getting people into these classes it's a good thing. Will most of them do anything with what they learned is another thing. I would have liked to been at this one also. Until agents and lenders offer the EEM as an option or until buyers ask for it nothing will happen. Once someone they know is involved with it is when they will get involved with it. The hard part is finding the few that are willing to take that leap of faith. I'm a Home Inspector and an Energy Auditor in Reno. We have a need for energy efficiency here but it's still a hard sell. Slowly through my connections as a Home Inspector I'm getting more people involved with the Energy Audits. 

Comment by Craig Bird on May 24, 2012 at 2:05am
Ms. Jeffers - I am not sure where you thought politics really came into this discussion as Mr. Delconte seemed to be making a societal observation regarding the motivations of homeowners. My observations counter his beliefs regarding that motivation. I will also add that my territory is influenced by neither taxpayer nor ratepayer money. I have also noticed that you can take a very rich CEO type that turns his nose at the very thought of saving a pitiful $500 a year. Then simply ask him how much energy he is willing to waste, then watch him jump out of his chair and demand a fix. Before you assume this is some big scheme, maybe you should actually hear their stories and see the problems they face that "contractors" have so carefully installed.
Comment by Craig Bird on May 22, 2012 at 5:06pm

Tom, you talked to Wells Fargo - don't you think that will skew your view a bit? I talk to about 3-5 real homeowners per day. They call us because they are concerned about the energy efficiency of their home. You can think what you say is factual as much as you want, but what I see in the field is very contradictory to your belief. They give a damn just because of the reasons you state - they know they are not going to move, so they are thinking more long term, think about how to cut their monthly energy costs, thinking about how they are sick of that back room being hot, thinking about where they can invest their money since the stock market sucks. Their conclusion is into their house or I would be out of a job.

Comment by Craig Bird on May 22, 2012 at 4:37pm

What's with Mr. Negative? I talk to people every day that are concerned about energy efficiency. Even more are concerned about comfort and air quality. In fact they are not poor, nor unsuspecting. They actually research things and want their homes to work right. Some don't give a damn - many do. If you see the work that your regular contractors do that home performance contractors fix, you would see the social contribution - my homeowners sure do.

As far as the real estate market goes, Realtors already have way too many hands in the pot for the average transaction - inspectors, appraisers, handymen, contractors, title people, mortgage people. All these people add more work for the Realtor. Yet another inspection, is just another thing that can make a deal go bad.

That said, there are Realtors that get it, and they often attract clients that also understand and demand it. Look for Certified Green Broker's - then talk to them and find out if they are just green-washing or are real.

I have yet to find a Realtor that is going to recommend an energy audit at every sale like a home inspector. Home inspectors are being cross trained but they still lack the comprehensive building science training to create comprehensive solutions for homes have a combination of bad installations of mechanical and building envelope systems affecting comfort, efficiency and air quality.

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