Where is the money in energy auditing / home rating?

I'm a real estate broker that became certified as BPI building analyst to provide energy audits for my clients when buying a home.  Since then I have expanded into providing home ratings for my sellers that have taken the time and investment to improve the energy efficiency of their home and it has rewarded my real estate business ten fold. I'm thinking about taking it a step further and become a HERS rater but want to see if there is additional income possibilities if I move forward with that step.

I'm curious though for those of you that are energy auditors and home raters, where is there a viable business model for energy audits?  Is it pursuing home performance work with air sealing, HVAC, insulation or are there individuals/companies out there that perform energy audits and home ratings for architects, builders, contractors, etc and make a nice income strictly on the rating side of the business?

Thanks in advance.

Rob

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I make a living with a stand alone audit/rating business. The three areas of focus include Code compliance for jurisdictions in my area, Green certifications for multi-family housing projects and low income tax credit work for the state of Kansas/Missouri. Homeowner work is basically non-existent. As more jurisdictions adopt the energy codes business increases. Get certified (RESNET-Energy Star- NGBS) Talk to code officials, join the local HBA and establish credibility with those groups. Work to get the Energy Code adopted in your area.

Hay Bruce -  I feed off some of your leads.  I make a living doing HVAC/ building science/ CO / IAQ   -  I am looking for true friendlys to increase my business.  80-95% of realtor/loan closer will  kill energy codes.

@Eric, please elaborate re: "80-90% of realtor/loan closer will kill energy codes"

Most realtor/loan closer look at just there close rate and not best for bill payer.  Monday I was working with Jullia who has been looking at houses for 3 mo.   She found a "good value" older home that was flashed - just painted  and cleaned but the base things like attic sealing and Energy Star with Home energy over haul was by passed and I tried to put in loan with HUD so can wrap energy saving equipment, adding R to attic, sealing whole house and crawl space.   On web sight says will add 6-8% to loan, realtor/loan closer will "not look into this"  "just slows down"  "not way its done".   This has happen lots before to me so I just use other ways like pace or 3 rd party.    I try to set the loan up to match energy saving.   I just get burned out 

Ok, now I understand. I think that happens pretty much everywhere. But forgoing energy retrofits at resale doesn't affect code compliance. And in cases where the energy code would apply (i.e., a major renovation or addition), the realtors/closers can't override what the code requires. 

I have completed 5 Energy Efficient Mortgages under FHA and VA, and got paid for them.  I have worked on 8 more and not been paid. The loan originator or the home office underwriter will deep 6 the EEM every time. We can't close on time. or it is too complicated, or a Full HERS Rating with iA being required for a VA loan (not required).    Wells Fargo ignores the % limitation based on the local market value. They insist on a flat 8K max.  in 2012 Atlanta had a 15K limit based on the % limit.

I have quoted pricing for several since 2014.  It gets stuck with the paper processors  Everyone wants me to get paid a closing.  I now require a written statement signed by The Loan Originator, the Home Office Underwriter and both realtors guaranteeing payment at close OR I get paid in advance.  I also insist that I reccieve a phone call from the HO Underwriter to discuss the process and make sure I get it right to their satisfaction.  Starting with  the VA requirements and then being required to do a full HERS Rating has to be decided before I get into it very far. The 5 I have completed were all situations the Sellers Realtor held fast to EEM or not buying and no other buyers were in sight. Not happening in this sellers market.

I live in a smaller town and the saving grace is that the community is very energy efficiency/conservation minded. I currently only do audits but am looking to self perform for air sealing and insulation as I come from a WAP (Weatherization Assistance Program) background. Bottom line is that you have to diversify your offerings to your area and community in order to stay busy for your main source of income. Audits alone could also be a good side gig for somebody if that's all they're looking for.

There is huge money in asking the homeowner if they want more info on energy saving solar power. Give me their name, I make the sale, I send you $1000 or more. And don't forget whole house fans - they slash the cost of solar so they come for free. See http://www.invisco.com

We can't use whole house fans in a hot humid climate

If realtors accepted any type of referral fee for work done by another party, they'd have to create an Addendum stipulating the company and have every client sign it. I've been offered fees from window companies, solar companies, HVAC companies, even security companies.  I don't accept those referral offers. It's best to tell clients and companies that we refer for the best work, not on the pretense of accepting fees. 

We divide the business into 2 parts - energy audits with retrofits, and new home airsealing with perhaps 50% getting a rating for Energy Star or other reasons.  

I think that ratings on an existing house are a non-starter right now because there is nothing you can do with them that generates income for anyone.  We have tried to get the real estate business (mid-Atlantic region) to accept documented energy efficiency as a boost for appraisals, but even my own new house with a HERS 44 and 24 with solar got only "best" in all the categories.  State of Maryland is the highest potential for this in the near future of anywhere we work.

New homes are another matter.  We have several builders building 100+ houses a year in the 45-52 HERS range.  The two biggest (one is 300+ per year) don't bother with Energy Star any more.  They all market it heavily with very good success.

If you want to save a lot energy and make some money in the process, you have to get affiliated with a state or utility audit/retrofit program, and in new housing you have to find a couple of larger builders that believe in what you are doing.

Some have been able to make money going after the high-end client and charging big bucks, but that seemed like a hard row to hoe to us.  

It ain't easy to keep a lot of balls in the air, but like any other business, if you can't sell it, then you don't get to do it, so get a trained sales department going.

Good luck

Rob - before you do the RESNET training for extra income check to see the services provided by your local utility providers.  I did the course and audits is 1999 and both of my local electric providers offered the RESNET certification free shortly thereafter.  I learned from the course content so it was not a waste of time but not income producing.  

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