“Ask anyone if they want to live in a more comfortable home that costs less to operate, and the answer is always yes; 100 percent of the time.  What they’re really saying is they want to have the ‘green’ features that make a home more comfortable and more efficient,” says Greg Slater of Nest Realty. In other words, green features sell homes.

And he should know. 

Together with Michael Guthrie, CEO and Principal Broker of Roy Wheeler Realty Co., Slater was instrumental in converting the CAAR Multiple Listing Service (MLS) to be one of the first green MLS in the country.  They successfully incorporated the National Association of REALTORS® green fields data set, making it easier for sellers to call attention to their homes as green, and easier for interested buyers to find those homes. 

How are green features playing in the local real estate market and where is the market headed? There seems to be universal agreement that the interest in energy efficient homes is gaining momentum and that high-performing homes are almost always worth the investment, whether you are a buyer, seller, or an owner not yet in the market.

What Buyers Want 

Slater says that green features may not be the top priority for everyone, but for many buyers, it’s in their top three.  So as a homeowner, it’s important to know what key upgrades result in the greatest efficiency improvements.  These include insulation and weatherization, ENERGY STAR® appliances; HVAC efficiency and programmable thermostat; LED lighting; low or no VOC paint; smart home technology and water saving features. 

Some of the most impactful features are the least exciting.  Like insulation.  It’s hidden; it’s not fun; and there’s no “ooh” and “aah” involved.  But dollar for dollar, it is likely to have the biggest impact on a home’s performance.  Few buyers can calculate the R-value, or even know what the R stands for, but most do know that a high number is good.  So make sure yours is up there!

Solar energy is becoming more attractive as the cost comes down and the systems evolve.  Panels are becoming less obtrusive.  Some advanced materials even have the photovoltaics built into the actual material rather than mounted on the home’s roof.

Knowing what upgrades have the greatest impact on sales is complicated.  A good real estate agent and professional home energy assessor can help an owner develop an improvement plan to match what buyers want. 

Who are the Green Buyers?

It’s not just Millennials that are shopping for green.  Every demographic, generation and economic stratum is looking for more comfort and value by going green.  A couple is just as interested in reducing utility bills as a family.   Lower income households may want to reduce maintenance costs even more than those who aren’t watching their budget.

Guthrie says, “Buyers are much more educated when it comes to green features and sustainability.  Many are willing to spend extra money if there’s a reduced carbon footprint and greater efficiencies.”   That’s good news if you own a high-performing home or are in a position to upgrade some of those key systems.

He notes that the more information the seller provides to the real estate agent, the more your home will stand out from the rest of the market.  A recent example is a home that just wasn’t moving this year until another agent took charge and marketed the green features.  Then the home sold quickly and for more than the ask price. 

Buyers are out there looking, but the owner and agent must communicate what they have to offer.

Even though the MLS conversion took place several years ago, we have not yet realized its full benefit to buyers and sellers. 

It’s an education process for all the parties involved.  As more REALTORS®, home appraisers, and buyers become better educated about the resources and benefits of green systems and upgrades, the demand will continue to grow.  Homes marketing those features will command a higher selling price and sell quicker than comparable homes without them.

Appraisers – Capturing the Value

There’s a rule of thumb that applies to home renovations: Don’t be ahead of the market unless you know where the market is going and when it’s going to get there.

According to Woody Fincham, SRA, AI-RRS, President of Accurity Fincham & Associates, Inc., it’s clear that the market for green homes is going up.  And he understands how important it is to score a high-performing home accurately.  If an appraiser fails to capture that value in his appraisal score, everybody suffers.  The seller won’t get full value and the buyer may miss knowing that a high-performing house is on the market.

Most of Fincham’s work is tied to a pending transaction (e.g. homes that are sold but not yet closed).  But he also helps owners evaluate whether an investment in a particular green improvement makes sense.  In either situation, the purpose of the appraisal is to quantify the value of the home and the features that will impact its performance; then clearly communicate that value to the owner, real estate agent, buyer, and lender. 

Most improvements are worth making.  But Fincham says there are scenarios that will outstrip the market.  It may not make sense to invest in an off-the-grid home in the middle of a subdivision, but on eighty acres in Louisa County, that may be a very attractive improvement.

Regardless of what features are present, if that value is not quantified and flagged for the real estate agent, the homeowner loses.  In other words, make sure a knowledgeable appraiser is part of your team.

Third Party Certification

It’s a good bet to go with third party certification.  HERS Index, LEED Home, EarthCraft, and Pearl Home Certification are some of the players in the single family market.   Research supports the theory that third party certified green homes sell quicker and for more money than their non-certified comparable homes.  

Pearl Home Certification was founded in Charlottesville.  Operating nationwide, Pearl identifies and scores the assets that make a home healthier, more comfortable and energy efficient.  These relate to the building shell, heating and cooling systems, appliances and equipment, and home management (e.g. smart thermostats).  Pearl then assigns a certification level of Silver, Gold, or Platinum, depending on the number of points earned.

“Exciting things are happening here.  Pearl has certified 244 homes in the Charlottesville area and more than 1500 homes in Virginia.” said Joseph Gentile, Vice President of Real Estate at Pearl Certification.  “Data analysis shows that when marketed properly, Pearl Certified high-performing homes sold for 5% more than comparable non-certified homes.  They were also on the market for a shorter period of time.”    

Enlightened REALTORS® encourage home sellers to get a third party certification if the home has green features.  Keith Smith, with Roy Wheeler Realty Co., can’t overstate this value and sees the several hundred dollar certification fee as an investment. 

“It is so important to assure that you get all the information about a home’s assets so you can justify its value in the marketplace.”  Smith explains that Pearl provides the real estate agent with an entire marketing package to help the home compete favorably.  And just as important, Pearl generates an appraisal addendum to fully inform the appraiser about the dollar value of these high-performing features.  This leads to a higher final appraisal.

Slater refers to Pearl as “the EASY button” because they package everything the seller and REALTOR® need to get the value out of the home and in front of the buyer and appraiser.

What’s Next?

There is no doubt that home technology and performance are improving.  The state of the art changes every year.  Not too long ago, very few homes had programmable thermostats.  Now that is standard fare, in new AND in older homes. 

Chris Fuller, PE, LEED AP, Senior Mechanical Engineer at Staengl Engineering in Charlottesville, is in the business of high-performing homes.  Passive House.  NetZero.  That’s where Staengl Engineering shines, and they are recognized and in demand nationwide. 

Fuller says, “We are designing different buildings than we did just one year ago.  The next big breakthroughs will be in hot water systems and materials.  We are beginning to consider the embodied energy of materials and take a cradle to cradle approach to the building process.  One cutting edge product is weather-proof insulation, in which the insulation and exterior of the home is one solid sheet.” 

A project that Fuller is particularly excited about is one that he works on in his spare time.  The EcoVillage in Albemarle County is scheduled to break ground in 2020.  This 38-home proposed co-housing community will strive for NetZero or positive energy generation and zero waste.  They’ll look beyond standard practices to achieve both. 

Homes will be positioned to maximize passive heating and cooling, taking advantage of solar power and existing air flow and wind direction through the site.  Rain water systems are included, with plans for future gray water plumbing and platforms for home energy storage.

Some of the EcoVillage efficiencies are easier to achieve because an entire community is being designed from scratch without the restrictions of a pre-existing street grid.  But most homes being built in central Virginia today are achieving energy efficiencies and performance that were out of reach even a decade ago.  And Fuller only sees that trend continuing.   

How does your home stack up?

Ask yourself whether the home you live in supports good health or detracts from it.  Is it comfortable?  Is the expense to operate and maintain it reasonable?   Whether you are buying, selling, or staying put, improving a home’s performance through green features is the number one way to improve health, comfort and efficiency. 

A buyer may pay a premium to enjoy greater comfort and a lower cost of living in that home.  Today, it’s not unreasonable to expect that the highest performing homes may have no monthly heating and cooling bills at all.

A seller will likely get a higher sale price with energy efficient systems and high performance features.  Today, it’s not uncommon to see a home with a for sale sign out front and a truck blowing insulation into the attic to boost the ask price.

 And if you’re staying put, converting to a high performing home today will pay a return on that investment over time.  If certified by a third party, those upgrades can also increase the sales price when the property eventually changes hands. 

In a hot market, all homes sell.  In a warm or slowing market, the high performing homes will stand out even more than they do now.  High performing green features make the difference, both today and tomorrow, between homes that sell, homes that sell quickly, and those that do not.

This post appeared in the September 25, 2019 issue of the Charlottesville Area Association of Realtors Real Estate Weekly under the byline of Carla Huckabee.