5 Surprising Facts About Green Real Estate
5 Surprising Facts About Green Real Estate
In the multiple green real estate sessions at the 2015 REALTORS® Conference & Expo in San Diego, most presenters and panelists agreed on the trends and techniques that will help home owners create healthier, more efficient living spaces. Here are a few points about this growing niche that you might not already know.
It’s a Powerful Tool for Differentiation
Roland Macias, a senior loan consultant specializing in energy efficiency mortgages at imortgage.com in Cerritos, Calif., said he sees often agents getting leads based on their green expertise.
“If you properly know how to use your GREEN designation and green lending, it’s going to get you more listings,” he said. “This gives you a special edge versus other agents because now you have a way to finance these things without the seller having to do it.”
NAR’s GREEN designation has recently been updated and improved, and presenters at several sessions were raving about the upgrades. Learn more about obtaining the designation.
It’s also a great way to maintain relationships after the sale. If you prove helpful in finding and financing a green home, your client may be more likely to think of you when it’s time to sell. But it also gives you more meaningful touch points when it comes to staying in contact, according to James Mitchell, GREEN, CEO of Renewablue, and partner of The Group Real Estate in Fort Collins, Colo.
“Instead of just asking about the kids, call them in winter and ask about the comfort of their energy-efficient home,” he said. “Lets add some sustenance to these conversations."
It’s an Opportunity for the Industry
Mitchell says that currently, green real estate and regular real estate are running on parallel tracks at their own peril. But if the industry as a whole is able to merge them into one, it would better demonstrate the value of the REALTOR® brand.
“If we can’t take the parallel [tracks] into one, our entire industry is at risk,” he said. If real estate pros in general could see green expertise as equal to other duties to clients, it would be harder for outsiders to disintermediate them from the transaction. “In our Code of Ethics, Article 11 states that we have a duty to be competent in the field of our practice. So if a client wants to see a high-performance home, we have a duty to know.”
Devon Hartman, principal of Hartman Energy Strategies in Claremont, Calif., agreed that the industry could enhance its leadership standing by going all-in on green. “I personally believe that REALTORS® are the vanguards of this next wave of change across the country,” he said. “It is a giant opportunity for you to lead this revolution that is quietly forming right now.”
The Best Investments Aren’t What You’d Think
Most people think of solar panels and new windows first when it comes to energy-efficient upgrades, but those are actually some of the last items they should consider.
Mitchell said clients are drawn to solar panels because they are a visual cue to the rest of the neighborhood that the home owner cares about the environment. But he pointed out that adding solar panels to an inefficient building doesn’t reduce the amount of energy being used; it simply means the energy is coming from the sun instead of oil or coal. Instead, he suggests power strips and high-efficiency lighting as a better place to start saving energy.
Laura Reedy Stukel, BPOR, GREEN, of L.W. Reedy Real Estate in Elmhurst, Ill., said the case for new windows is often overstated. “The windows guys are brilliant marketers,” she said. But really, “the most important thing is insulation and air sealing. If you haven’t done that, windows aren’t going to do anything.”
Lower Energy Bills Pay Off Several Times Over
Some in the appraisal and lending worlds have been slow to translate both consumers’ willingness to pay more for green features and the impact of energy savings on lowering the cost of home ownership. But several panelists agreed that the data supporting such assertions is nearing a tipping point. In particular, Hartman noted a recent Rocky Mountain Institute study that found a 5.9 percent increase in property values thanks to green features. But Craig Foley, e-PRO, GREEN, managing partner and energy consultant for inCharge Energy LLC, said that in areas such as his where customers pay a premium for energy, the payoff can be even greater.
“We know now that for every dollar invested in home energy improvements, it's putting three dollars in consumers' pockets,” he said. “Every one dollar of annual energy savings translates to $15 to $20 at the point of sale.”
Though there are national programs encouraging home owners to go green, it’s important for real estate pros to know what kind of rebates are offered at the local level, both through the government and from businesses such as utility companies. Bookmark the Database of State Incentives for Renewables and Efficiency website to access a search of what’s available in your area.
Another way to be better able to communicate the benefits of green living in your specific community is to walk the walk yourself, according to Mitchell. “Get an energy audit on your own house,” he suggested. “Do it in your own home so you can experience the value.”