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.

Passive Houses Use 90% Less Energy —Really?

Yes, really.  You think the oil, coal, natural gas and HVAC companies want you to know about this. NOT.  The Passive House movement is in its infancy in the US but it’s already a young adult in Europe.  It’s called “passive” because heating or cooling these homes relies completely on natural resources.  In other words there are no active systems involved in the 90% reduction in energy use!  How is this possible I’m sure you want to know.  Why didn’t I know about this might be another question.

A passive house uses orientation, super insulation, advanced window technology, air tightness, and shading to achieve standards that are set by the Passiv Haus Institute. These standards eliminate the need for a conventional HVAC system or for solar panels and geothermal systems.  Although some homes have an option for solar systems.  An energy recovery ventilation system provides a constant, balanced fresh air supply, a uniquely terrific indoor air quality, AND reduces energy use and carbon emissions, according to the Passive House Institute US (PHIUS)

Do passive houses cost more to build?  Yep.  David Peabody, a Washington metro area architect and passionate promoter of sustainable architecture and passive houses is building a passive house in Bethesda, Maryland.  He found that the increased cost for the home he’s building is about 8%.  For a 90% reduction in monthly energy bills I’d say it’s worth it.  A certified passive house uses less than 1.4 kWh per square foot in heating and cooling energy and uses less than 11kWh per square foot for all energy!  By the way,  existing homes can be retrofitted to meet many passive home standards.

Barbara Landau and her family are building a second home in Vermont.  A Passive House–in Vermont–with no furnace.  When several insurance companies asked what kind of heating system the house would have and were told NONE, they declined to insure the house, thinking the pipes would freeze.  They won’t.  This excellent NY Times article chronicles their story.

The passive house movement was started when conversations between two German professors at the Institute of Housing and the Environment led to the first passive houses being built in Germany in 1990. To date it is estimated that 15 to 20 thousand passive buildings have been built worldwide, mostly in Germany and Scandinavian countries.  The US numbers are far, far fewer.  Remember, the movement here is still a nursing baby, but one that is being nurtured by it’s German parent.

This map represents the Passive projects currently underway in the United States today.  The squares have been certified, the circles pre-certified and the triangles are in the planning stages.  Green represents single family homes, red  education, blue multi-family and gold are retrofits.

Buildings use more than 40 percent of all the energy consumed in the United States.  If builders were to embrace the passive building concept, both the cost of building and the use of nonrenewable energy sources would decline.

 

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.

If I Want a Green(er) Home Where Do I Start?

There are no national standards for what a “green” home really is.  The USGBC (United States Green Building Council) has the most recognized green building and retrofitting/remodeling  standards in the country.   But there are others—all with different standards.  There’s the National Association of Home Builders (NAHB), Build It Green and Built Green (yes, different organizations).  Then there are local standards such as Arlington, Virginia’s Green Home Choice Program.  Well you get the picture–whose standards do you use.  But here’s the thing—right now, in the Washington Metro area where I do business, there just aren’t a lot of new homes being built to any particular “green” standards.  Many builders are at least building all new homes to EnergyStar standards.  But as I said last week, energy efficiency alone does not a “green” home make.  And with the exception of USGBC, most of these ratings are for new construction.

So most of my clients are just trying to figure out what things they should do to upgrade and retrofit their older existing homes—either the one they’re buying or the one they’re selling—to make them more eco-friendly.  What is the first thing you should do?  Well I believe reducing your energy consumption is one of the most important and cost effective things to do first.  This isn’t necessarily sexy like putting in cork or bamboo floors or ice stone countertops. But it will have a measurable effect on reducing your impact on dwindling and non-renewable resources as well as significantly reducing utility bills.  Even if your home is only ten years old, it probably pretty energy inefficient.

First, insulate. I know—BOOOORING.  Oh well—so use the money you save on utility bills to buy an Ipad or something.  The cost of heating and cooling a home is 50-60 % of the total energy bill.  A few hundred dollars spent on insulation alone can cut a home’s energy bill by up to 20% per year.  There are many types of insulation and I’m not going to discuss them here.  But there are environmental concerns  to some degree for most of them.  So check out this link that discusses the pros and cons.  Some of the cons do have indoor air quality issues.  I will tell you that my favorite insulation is made from blue jeans. It’s the ultimate in reduce (get rid of some of your 10 pairs of jeans), reuse, and recycle thinking.

Second, air seal–also not exciting.  But like insulation, air sealing stops you from paying to heat and cool the outside of  your home. You can find many leaks simply by feeling the air coming in around doors and windows.  However, many leaks that come from spaces holes in attics, basements and crawl spaces.  These can be harder to find and a much bigger energy waster.  You might consider having a professional energy audit.  Energy auditors use equipment, such as infrared cameras and blower doors,  designed to suss out all the leaks in your house.  Some state energy departments have programs that are free or for a nominal fee, will do an energy rating on your home.

Oh, and by the way– there’s a 30% federal tax credit (up to $1500) on energy efficiency purchases until December 31, 2010. So this is the year to give that home you’re buying or selling, an energy makeover.

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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.

If It’s a “Green” Home, Can I Afford It–And What is a “Green” Home Anyway?

So you’re thinking about buying a green home. What does that mean, actually?  Does it mean buying a really big expensive home with “green” features?  Does it mean buying a really small home with a tiny ecological footprint?  Does it mean solar panels and a wind turbine in your back yard?   Does it mean you’re being a hypocrite if you don’t use rainwater barrels and stop driving your car?  Does it mean spending a lot more money than you ever would for a regular house?  “Forget it.  I’ll just buy a regular house.  It’s all to complicated, expensive and politically correct for me to figure out,” you might decide.

Or, you decide to sell your home that needs some work to get it on the market anyway.  So you decide to do all green upgrades.  Well, what does that mean exactly?  Do you have to replace your 5-year-old hot water heater with a tankless one?  Do you have to install all new windows that are triple paned and very expensive? Do you need to replace your oh, so ordinary hardwood floors, with bamboo?  Do you have to invest in solar panels to say your house is energy efficient? Will you recoup the investment?  “You know what, I’m just going to do the old standard stuff—paint, carpet, replace a couple of appliances and be done with it,” you might think.

NO, NO, NO and more NOs to all of these questions.  The myths about what a green home is, and how much it costs are many.  So I’m going to tackle some of the myths in my next few blogs and suggest some articles along the way.

The biggest myth is that buying a green home means buying a home that is many, many thousands of dollars more expensive than a regular home.  ­­First, there are nuances to what a green home actually is and that, in and of itself, is confusing.  Unfortunately green can be in the eye of the beholder.  Most new homes calling themselves green really just have some green features.  Until there are nationally agreed upon standards, what’s green will remain open to interpretation.

Buying a home with better insulation, a more tightly sealed envelope and EnergyStar rated appliances, HVAC systems and windows, does usually add a modest premium to the cost of the home.  But what is ultimately saved in energy costs and energy use, more than makes up for the additional premium.  But these are green features and do not give the builder the right to call the home a green home.  In fact, some new evidence is showing that homes that are tightly sealed but that still have VOC (volatile organic compounds) in cabinets,  carpet sealants, hardwood floor finishes, paint, etc—may be causing damage to the health of the home’s inhabitants!

There are some really great reasons to consider using sustainable standards when you buy or sell a home.  So, the bottom line is—buy or sell your home with an expert—someone who can guide you, advocate for you and protect you from greenwashing.  That would be ME–your EcoBroker certified, NAR Green designated Realtor.

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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.

Climate Change, Energy Costs, Tax Credits & Good Real Estate News

 

Climate Change

As you can see from the title of this blog, there’s a lot to talk about in this last week of 2009.  I must admit that I am both surprised and disappointed by some of the research statistics that have been have been touted in the last few months of 2009 regarding the environment.  For example, even though 93 percent of all climate scientists conclude that the rapid rate of climate change the world is experiencing is a result of human activity, only 43 percent of Americans believe them.  I have to quote Daniel Patrick Moynihan here and say,  “everyone is entitled to their own opinions—but not their own facts.”

Only forty percent of Americans say that heating and cooling costs are very important.  Given the fact that the state of the economy is a real concern for most people, it seems incongruous to me that the majority of Americans don’t see a correlation between  energy costs and their personal finances.  Wouldn’t any sure fire way to reduce expenses be a positive for a person or family’s bottom line?

Energy Improvment Tax Credits

The federal government thinks energy costs and climate change are important enough to offer some pretty good incentives to consumers/taxpayers.  You can get a tax credit of up to $1,500 for energy efficient home improvements that you make during 2009 and 2010.  So if you buy Energy Star appliances, water heaters, HVAC systems, windows, doors or roofs you are probably eligible for this tax credit.  This is a onetime credit and can be used in 2009 or 2010.  Be sure to go to the Energy Star tax credit page to get details for receiving the credit. 

But  In spite of this great incentive to consume less energy and save money, a new survey finds that when asked “if someone gave you $10,000 for home improvements, how would you spend it?” A majority said they would pick ways to make their homes look better, rather than burn less energy.  Most of the 508 people surveyed said their energy costs would have to rise by $1,500 per year for them to see these costs as “very important”.  Hmmmmm?

Winterize Your Home

But if you are concerned about saving energy and money and even if major purchases aren’t in your budget, there are many small things you can do to save money and energy this winter. According to the US Dept. of Energy drafts cause 5-30 % of the wasted energy in a home. You can simply roll a towel and use it to stop the draft. If you want to be a little fancier you can buy or make a draft snake.   Buy a window insulation kit at the hardware store.  Make sure to have your furnace serviced twice a year and change your furnace filters once a month during the heating season.  Here are seventeen more tips  for winterizing your home. 

 Good Real Estate News

The economy is showing signs of improvement, jobless claims are way down and the sales of existing homes has risen by 44% year over year from this time last November.  In the Northeast sales have risen 57%!  This is good news. Banks are lending and the first time and move up buyer tax credits have been extended until April 30, 2010. Settlement doesn’t have to take place until June 30, 2010.  A single person can earn up to $125,000 and as long as he/she hasn’t owned a home in the last 3 years, they’re eligible for the first time home buyer tax credit of $8,000. A couple can earn $225,000. Move up buyers who have lived in their home for five out of the last eight years are eligible for a $6,500 tax credit with the same income limits.

Happy New Year!

Gayle

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Gale10

www.goinggreenhomesva.com

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