Energy Efficient Homes Sell For More

When a seller decides to make improvements to get their home sold for the highest price, painting, landscaping, de-cluttering and staging are the things they are most often told to do by their real estate agents.  After all, most buyers don’t examine the insulation in the attic or check for drafty doors and windows when they’re looking at home. But since buildings use 40% of all fossil fuel energy in the United States, the idea that sellers can quantify energy use is becoming a more marketable factor in home value.

Occasionally buyers will ask what the utility costs are when they have seen a home they would like to consider. And occasionally sellers will proactively display monthly utility costs if they happen to be pretty low. Since the cost of utilities is a recurring monthly expense just like a mortgage it make sense to think of the utility bill as part of the overall cost of home ownership.

Just like buying a car, homebuyers are looking for something physically attractive.  In other words, they aren’t going to buy a house that is unattractive to them just because it’s energy efficient.  But surveys show that energy efficiency is becoming more and more important to buyers.  In fact 39% of all homebuyers say energy efficient is a very important factor in their home buying decision.  New home building codes are mandating higher levels of energy efficient standards.  However, older homes have no such requirements.  So a seller who consciously improves the energy efficiency and has an agent who knows how to market these improvements can expect more interest in their home and possibly a better price if the home has the other attractive features a homebuyer is looking for.

In order to assess the energy efficiency of a home the homeowner should first have an energy audit performed by a reputable auditor.  Once the report is in hand the homeowner can proceed to systematically make the improvements necessary to make the home more efficient.  And the improvements don’t need to be cost prohibitive or so expensive that the seller won’t recoup the investment.  For instance, windows don’t necessarily need to be replaced if they are old and single pane. Simply caulking and/or new storms can dramatically improve efficiency by cutting down on drafts.  On the other hand, if the home won’t be sold for a number of years, new windows may be worth the investment.

If the HVAC system in a home is more than 15 years old it might be worth replacing even if it hasn’t broken down.  In 2006 the SEER rating (Seasonal Energy Efficiency Rating) was mandated to be at least 13, which was a fairly dramatic increase in energy efficiency.  Today HVAC systems with SEER ratings between 18 and 23 are available.  The lifetime cost of operation for a 23 SEER rated HVAC system is half that of an older 8 SEER system.  The cost for a new HVAC system is much less than a complete kitchen remodel for example, and if properly marketed in the sale of the home, may be a better investment.  After all you can’t account for someone else’s taste in kitchen design.  But knowing you have a new furnace that will save you hundreds of dollars in energy costs over the course of a year, and is good for the environment because of lower greenhouse gasses, is certainly a good selling feature.

Insulation is a biggy and a very cost effective improvement.  Using an insulation material that is free of formaldehyde, which is not good for  the indoor air quality in a home, adds yet another marketable eco-friendly feature.  This article from the Sierra Club Green Home has some great tips on insulation.  If you’re thinking of replacing older appliances to add value and appeal to your home be sure they’re Energy Star rated.

A Realtor who understands the importance of marketing energy efficiency and eco-friendly features of a home can add thousands of dollars to the seller’s bottom line.  To often when I preview or show homes I recognize features that I point out to clients, but that are nowhere to be found in the marketing material, either online or in print.

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Gale10

Gayle Fleming

http://www.goinggreenhomesva.com

gaylefleming48@gmail.com

703-625-1358

My purpose is to serve my clients and advocate for their highest and best good, so they attain their real estate goals.

Energy Efficient Mortgages Reduce Your Monthly Housing Expenses

When a lender figures the monthly mortgage amount that a buyer can afford whether it’s a purchase or a refinance, the amount is calculated to include principle, interest, taxes and insurance or PITI.  But there’s another cost that is beginning to be taken into consideration—utilities.  If you buy an older home with old single pane windows, old appliances, an old furnace, poor insulation, etc., the monthly cost to own the home can increase dramatically.  If you don’t have the money to replace some of these items immediately you could spend hundreds of dollars more each month on energy   costs.  And if you decide to make some of the improvements or buy appliances on your credit card that just adds to your debt at pretty high interest rates.

But the FHA 203(b) loan, or Energy Efficient Mortgage (EEM) Program can help buyers and refinancers to make their homes more energy efficient and save a considerable amount on their monthly utility bills.  “The EEM Program recognizes that the improved energy efficiency of a house can increase its affordability by reducing operating costs.  Because the home is more energy efficient, the occupants will save money on utility costs” and significantly reduce the amount of money needed each month to operate the home. So here’s how it works.  When you take out an FHA 203 (b) loan you can add up to $8,000 to the loan amount even if it goes over the FHA maximum loan amount or over what you qualify for.  This additional amount is at the same rate as the original loan.  So if you lock in at say, 4.25%.  The additional amount is rolled right into the loan at the same rate. Here are some of the things you can do to improve your home’s value and energy efficiency: New windows, insulation, passive or active solar improvements, heating and air conditioning systems, appliances.  Now needless to say $8,000 won’t cover all these things.  So the borrowers needs to determine what things they want to do and how much it will cost.

Prior to settlement the borrower submits a home improvement energy package and the costs to the lender.  Then a HERS  (Home Energy Rating System) energy rater has to inspect the property to determine whether the cost savings over the life of the loan will be greater than the loan amount.  The buyer, seller, lender or agent can pay for the cost for the inspection.  Once the rating assessment has been done and a satisfactory rating has been determined, the lender can escrow the amount of money in the proposal.  All work must be completed within 90 days. Most lenders don’t even know about this loan or if they do they don’t offer it.  Don’t ask me why.  So I was very happy when I found a wonderful loan officer at PMG Mortgage who made it his business to research the loan and convince his company to offer it to borrowers. Vince Coyle  is ready and willing to work with borrowers on this loan product.

Given the low interest rates right now this loan is an excellent way to get a lot more bang for your energy efficiency buck.  Plus, after you make some of these improvements most states have some tax credits and incentives that you might be eligible for.  Here are the federal tax credits that are available now.

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Gale10

Gayle Fleming

http://www.goinggreenhomesva.com

gaylefleming48@aol.com

703-625-1358

My purpose is to serve my clients and advocate for their highest and best good, so they attain their real estate goals.

I Think I Need An “Ask Me About” Button

You’ve seen those buttons that people wear, right?  “Ask Me About” something or other. I think I want an “Ask Me About EcoBrokers” button.  I’ve been an EcoBroker for three years and have had the National Association of Realtors Green Designation for two years. I proudly announce this on my website, on my email signature, on Facebook and Twitter.  But buyers and sellers never ask me about it, or how having these designations make me different from other real estate agents.  Yet they do make me different.  When I’m showing houses buyers don’t tend to ask me about the things that will affect their bottom line once they’re in a home—like “how energy efficient is this furnace or do you think I should replace the windows?”  When I talk about how the home’s orientation will affect their energy use for better or worse that information doesn’t seem to enter the equation.  Likewise, when I discuss walkability and potential resale value there is a clear disconnect.

Yesterday at an open house I had on my name badge and a button that said EcoBroker (not “ask me about” though). I had booklets on energy efficiency and my cards which say I’m an EcoBroker. Not one person asked, “What’s an EcoBroker.  Not one person picked up the energy efficiency booklet or asked about them.  Maybe I’m just nosy, but I would have asked.

Now I’m not expecting buyer and sellers to become tree huggers necessarily.  I mean, they don’t have to build straw bale homes and put solar panels up to bolster their “green” creds.  And I’m perfectly okay with my role as educator—to reach out to my clients and help them to be more informed about the personal environmental consequences of their home buying and selling decisions.  I would like to see the conversation around home buying and selling include questions like “Can you find out if the seller has made any energy efficient upgrades in the past few years or, “Will you advertise the fact that I’ve put in dual flush WaterSense rated toilets and EnergyStar rated appliances?” The answer from me would be YES to both of those questions.

There is no doubt that the future of home building and home renovations are moving toward more sustainable practices, especially in energy and water use.  Buildings make up 40% of all the energy used in the US.  Buyers and Sellers should understand how these new practices will impact their buying and selling decisions. They should also be aware of greenwashing, the practice of making questionable green claims in order to sell a product.  As an EcoBroker and NAR Green Designee, I can help to sort through the new world of thinking sustainably as a home buyer or seller.  So the next time you see me, ask, “What is an EcoBroker?”  Here’s a video of me describing why I became an EcoBroker.

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Gayle Fleming  703-625-1358    www.goinggreenhomesva.com    gayle@goinggreenhomesva.com

What’s in a Footprint?–A Growing Market for Smaller Homes

A smaller house is a greener house, plain and simple–even if it doesn’t have EnergyStar this and EnergyStar that–even if it doesn’t have foam insulation, solar panels or a tankless hot water heater.  It’s greener because it’s carbon footprint is smaller.  A small house in a walkable neighborhood is even greener.

I have an adorable 1931 completely remodeled home listed for sale in the Clarendon neighborhood of Arlington, VA.  Clarendon is one of the most “sought after” neighborhoods in the city because of it’s proximity to shopping, metro, restaurants, night life, etc.  Because of it’s desirability, it’s a fairly pricy neighborhood.  The house has just under 1200 square feet–so not large.  But it has been opened up so that there’s a wonderful flow.  It has large windows and amazing light. The landscaped yard is lovely and low maintenance. And the fact that this small house was not knocked down to build a larger house makes it greener still.

Part of the neighborhood has a dense concentration of high rise condominiums. A condo with comparable square footage could run nearly $600,000 with a condo fee of over $400 per month.  Buildings use 40% of all of the energy used with high rise buildings using the majority of that.  Most high rise condo buildings are not very energy efficient.  So their carbon footprint makes a giant sucking sound.

Why I wonder, would someone be okay living in a high rise condo paying nearly $600,000 for 1100-1200 square feet and a $400 a month condo fee but feel that a 1200 square foot house with no condo fee is too small.  Now I have nothing against condos and I understand that condo living fits a certain lifestyle.  But I do wonder if there is also the perception that a house has to be bigger than a condo or apartment?  If so,  that perception is changing according to all recent studies.  The small home movement is growing.

When I was a child, which was admittedly a long time ago, the first home my parents bought had three bedrooms, one bath, a living room, dining room, kitchen and a big backyard with an apple and walnut tree.  There were four kids and I don’t ever remember thinking our house was too small.  I do remember yelling at my siblings to hurry up in the bathroom and I remember the nightly bath schedule.  By the time I was 13 we had moved to a house that had 4 bedrooms, one and a half baths and a den.  We thought we were living in the lap of luxury!

For many decades most families lived in homes about the size of the homes I grew up in.  Now there is a clearly defined trend towards smaller homes. The changing demographics of the average home buyer shows that  single women made up 21 percent of the homebuyers in 2009.  These women are professional with busy schedules and no time for the maintenance of a larger home.

The National Association of Homebuilders is reporting that the average size of new homes has been declining for the last four or five years and young people and empty nesters are flocking to smaller homes.  And the Wall Street Journal Development Blog reported just this month:

Gen Y housing preferences are the subject of at least two panels at this week’s convention. A key finding: They want to walk everywhere. Surveys show that 13% carpool to work, while 7% walk, said Melina Duggal, a principal with Orlando-based real estate adviser RCLCO. A whopping 88% want to be in an urban setting, but since cities themselves can be so expensive, places with shopping, dining and transit such as Bethesda and Arlington in the Washington suburbs will do just fine.

“One-third are willing to pay for the ability to walk,” Ms. Duggal said. “They don’t want to be in a cookie-cutter type of development. …The suburbs will need to evolve to be attractive to Gen Y.”

So my little beauty of a listing is right in line with the national trend. Small is beautiful! Have a look.

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Gale10

Gayle Fleming

http://www.goinggreenhomesva.com

gaylefleming48@aol.com

703-625-1358

My purpose is to serve my clients and advocate for their highest and best good, so they attain their real estate goals.

Green Building Market Grows 50% in Two Years despite Recession, Says McGraw-Hill Construction Report

A bright spot in the news about the building and real estate market.  It’s heartening to know that even for purely economic gain, there is a growing understanding of the need for a green economy to foster future economic growth.  This is a great article.

http://www.prnewswire.com/news-releases/green-building-market-grows-50-in-two-years-despite-recession-says-mcgraw-hill-construction-report-107547978.html

Do We Still Want Such Big Houses?—Space and Efficiency VS. Square Footage

Thankfully, in my opinion, the days of Hummer Houses, McMansions and Super-Size Me homes are numbered.  The housing trend that began in the 90’s toward larger and larger houses for smaller and smaller families is reversing itself.  This has something to do with the fact that in this economic climate, people can’t afford to buy or maintain ostentatious mini-mansions.  Keeping up with the Jones is a time-honored tradition in the US.  So until the housing bust, people were buying the biggest houses that a lender would give them a loan for, whether or not they needed or could  afford it.  But the downsizing also has something to do with a greater consciousness about how large our ecological footprint is, or should be.

Since the average family has declined so dramatically over the past half century, why do people want such big houses? The average American home swelled from 983 square feet in 1950 to 2,349 square feet in 2004!  According to census data the average household size in 1950 was 3.37 people giving each household member 292 square feet person.  By 2006 the average household was 2.61 and the average square feet of a home had jumped to 2,349, giving each family member 900 square feet!  Is this progress?  Is it our God given and Constitutional right to take up more of the planet than we need?  I’m just asking.

 

 

I think what most people really want is a feeling of spaciousness, not necessarily humongous square footage.  As I show homes around the Northern Virginia area it’s impossible not to show older homes built anywhere from the 20’s to the 70’s that have closed in, crampy rooms with lots of walls separating each room from the next.  Without a doubt, buyers today—especially young buyers want open and flowing floor plans.  They want a kitchen that opens into a family or great room and the formal living room, in many cases, has gone the way of the model-T.  Why not use that space for a library, office or spare bedroom.  Buyers want a kitchen that has lots of counter space and maybe an island but it doesn’t have to be gigantic—just super functional.

Now I’m not saying there’s no justification for bigger homes.  More people work at home part or full time.  So they need an office.  Relatives no longer live next door, around the corner or on the other side of town.  They may live hundreds or thousands of miles away and space is needed to accommodate family visits.  But this doesn’t necessarily have to translate into thousands of extra square feet.  For example, that formal living room that’s no longer needed is now the office, which can house a pull out sofa or futon to become a guest room as needed.  Since most of us use laptops, we can have a portable office located in the kitchen desk area or on the extended kitchen countertop.

Wouldn’t looking at a home from the standpoint of higher performance in terms of space usage and efficiency rather than number of square feet make more sense?  Remember the first cell phones carried around in vinyl or leather cases, that were bigger than today’s land-line phones?  Cell phones got much smaller, with higher performance and much more efficient—oh, and less expensive too.  I mean, nobody wants a bigger phone, right?  Or remember the first laptops—expensive, large and heavy.  Fast-forward to today’s smaller laptops, netbooks and the Ipad.

Fortunately, builders are getting with the program and consciously building smaller but very space efficient homes, both for financial reasons and because they are seeing the same trend.  And counties around the country are putting the skids on overly large homes with new zoning regulations, higher taxes for homes over a certain size and/or using a green building checklist that the builder must adhere to.

All in all this trend and the changing model for home sizes is good for the home buyer’s wallet and for the fragile planet that we share with 7 billion other people.

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Gale10

Gayle Fleming

http://www.goinggreenhomesva.com

gaylefleming48@aol.com

703-625-1358

My purpose is to serve my clients and advocate for their highest and best good, so they attain their real estate goals.

The End is Near and In With the Old and Out With the New

TAX CREDITS END THIS YEAR

On December 31, 2010 it’s lights out for the federal tax credits for energy-efficient windows, doors, insulation,roofs, hot water heaters and HVAC systems. So if you’ve been putting off making some energy efficient improvements to your home it’s time to stop procrastinating and as the Nike commercial says, “Just do it!”  Until December 31st you can get a tax credit of 30% of your costs up to a maximum of $1500.

Now if you want to really trick out your house with solar panels, residential wind turbines or geothermal heating there is no upper limit to what you can spend to get a 30% tax credit. And this credit is in effect until December 31, 2016.  This link will tell you what you need to know to get the tax credit.

BUT before you rush to do any of these things, have an energy audit.  Getting a tax credit for spending money you don’t need to spend is like buying something on sale that you already have and don’t need just because you’ll save money. When you have an energy audit which will cost you around $300-400, you may find out that you don’t need to spend that $20,000 on new windows–you just need to do some serious air sealing with caulking and insulation.

INSULATION

Speaking of insulation–the best and the most cost-effective insulation aren’t necessarily the same.  In a recent blog on the Green Building Advisor website, Carl Seville, an advisor who certifies green homes, discusses the downside of fiberglass insulation.  This is the insulation that most of us are familiar with and the least expensive choice for insulation. The biggest problem seems to be that it’s hard to install properly. If you’re thinking about doing some insulation before it gets really cold, you might want to check out his post.   Foam and blown in cellulose insulation are considered better choices but do cost more.

REDUCE, REUSE, RECYCLE

This is a motto we would all do well to live by to reduce the burden on our fragile planet.  But this philosophy can do more than save green trees–it can save green backs too.  So maybe you have some home improvements you want to make.  Most people would head for Home Depot or Lowes, right?  Well how about heading for ReBuild Warehouse or ReStore where you can buy new and gently used home improvement products and save more than 50%!  These are both Northern Virginia locations so if you’re reading this blog from another area, check the web to see what’s available in your area.  ReBuild Warehouse is affiliated with a company call Deconstruction, LLC, an environmental company that disassembles homes for builders or home owners doing major rebuilds or remodeling. ReStore is affiliated with and run by Habitat for Humanity

“BABY IT’S (GETTING) COLD OUTSIDE”

I have a great Energy Saver booklet to share with you.  If you email or call me with your address (if I don’t have it) I would be happy to mail it to you.  It has wonderful cost effective advise on energy savings for homes, appliances, cars, electronics, etc.

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Gale10

Gayle Fleming

http://www.goinggreenhomesva.com

gaylefleming48@aol.com

703-625-1358

My purpose is to serve my clients and advocate for their highest and best good, so they attain their real estate goals.