Ready. Set. Sell. How Energy Efficiency Can Help Sell Your Home. A Seller s Guide from Next Step Living. NextStepLiving.com Toll-Free:
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1 Ready. Set. Sell. How Energy Efficiency Can Help Sell Your Home. A Seller s Guide from Next Step Living NextStepLiving.com Toll-Free: Next Step Living, Inc.
2 Making a Move? As you prepare to put your home on the market, make sure energy efficiency is on your to-do list. Yes, we know this is a busy and stressful time for you. We d like to help. First, know that increasingly, energy-efficient houses: Stand out. Sales of green-certified single-family homes in Massachusetts jumped by 110 percent from 2012 to 2013, according to a report by Craig Foley, chief of energy solutions at RE/MAX Leading Edge. Command a higher price. Existing homes with a third-party green certification sold for 30 percent more than their uncertified counterparts, according to a study cited by Green Real Estate Investing News. Feel any better? We think you will if you consider the suggestions we ve put together in this ebook, Ready. Set. Sell. How Energy Efficiency Can Help Sell Your Home. With helpful information from real estate agents and appraisers, from home inspectors and our own energy advisors, this ebook lays out what you should do, why it s important and how to get it done. Easily and affordably. As if that weren t enough, you d be doing right by the planet too, shrinking the carbon footprint of your soon-to-be former home. How does energy efficiency impact the appraised value of a home? Energy efficiency is preferred by buyers, because it is good for the environment, saves money for the owner and is often an indicator of quality in construction. Energyefficient homes are also more comfortable, being free of drafts and quieter than nonenergy-efficient homes. Kathleen Bowen Ha LEED Green Associate American Society of Appraisers Comfort. Savings. Sustainability. What a great combination. As a New England homeowner all too familiar with the high cost of heating and cooling a house, think about your prospective buyers: They want comfort and savings too. Happy reading and selling. Good luck. Next Step Living 2
3 Table of Contents Ready Get a Home Energy Evaluation. Quick Fixes. Go Beyond Your Evaluation. Create (Inside) Curb Appeal. Document Everything Set What Agents & Appraisers Don t Do. Get the Right Agent. Inform the Appraiser Sell Homeowner Priorities. Best Foot Forward
4 READY. Ready. Set. Sell. How Energy Efficiency Can Help Sell Your Home.
5 Get a Home Energy Evaluation. A recent study showed that homes with third-party green certification command a selling price that averages 30 percent higher than homes without any green certification. How to get more green in your home and your pocket? Get a Home Energy Evaluation. A home energy evaluation gives you a point-by-point analysis of the energy efficiency of your home, and ways to boost that efficiency, many of them free or highly subsidized. Appraisers need metrics, so show them your home energy audit. Kathleen Bowen Ha LEED Green Associate American Society of Appraisers LEARN MORE ABOUT A HOME ENERGY EVALUATION. Read more at NextStepLiving.com/Evaluation Watch one at NextStepLiving.com/Watch Hear from a homeowner at NextStepLiving.com/Homeowner Schedule at NextStepLiving.com/Scheduling With a home energy evaluation, you get a thorough overview of how to make your home cooler in the summer and warmer in the winter while shrinking your monthly utility bill and your carbon footprint all of which can make your home more attractive to potential buyers. Want to sell your home faster and at a better price? Why not get a home energy evaluation? Sell Bookmark 5
6 Quick Fixes. It generally takes just a few hours and leaves you with an action plan of recommended next steps. (Please see p.7 for Go Beyond Your Evaluation.) Your energy advisor may also make some quick fixes, right on the spot, like swapping in high-efficiency, compact fluorescent lamps (CFLs) that will cut your utility bills immediately. Buyers value lower utility costs, and a home energy audit can help sellers start reducing those costs right away. Insulation and air sealing check Quick fix: low-flow showerhead Craig Foley Chief of Energy Solutions RE/MAX Leading Edge Combustion safety test Quick fix: efficient light bulbs 6
7 Go Beyond Your Evaluation. Here s the good news and the not-so-good news. The good: You ve taken your first step with an energy evaluation to make your house more energy-efficient and more attractive to potential buyers. The not-so good? What New Englanders can t see can hurt them when it comes time to sell, especially if the house is plagued by holes and cracks that leak air and generate outsize heating and cooling bills. Almost everyone I know who has had an energy audit has found leakage in areas they did not suspect. Air sealing, sometimes included in a home energy evaluation and typically subsidized, can dramatically reduce drafts (and in warm weather keep living space cooler), instantly improving comfort and trimming utility costs. Another help: Insulation. Also often heavily subsidized by local or state programs, it can cut up to 20 percent off heating and cooling bills, according to Energy Star. Making sure attic insulation is in place and not crushed under stored items is easy and very inexpensive. Kathleen Bowen Ha LEED Green Associate American Society of Appraisers Frank Lesh Executive Director American Society of Home Inspectors Think about door sweeps and weather stripping too. Weather stripping is the least expensive update. Changing the furnace filter or cleaning baseboard radiators is another one of the most common and least expensive improvements, adds Lesh. DID YOU KNOW? The typical homeowner will save, on average, about $500 per year with an energy evaluation and related weatherization. Source: Next Step Living ABOUT AIR SEALING & INSULATION There s no getting around it: Weatherization is messy and noisy work. But we do our best to control the dust, limit the noise and clean up after ourselves. If you have a fireplace, please don t use it on the two days before the start of your project. Any ashes in your fireplace would blow out into your living space when we do a blower door test to assess your home s air tightness. Sell Bookmark 7
8 Create (Inside) Curb Appeal. Warning: This may be painful. Put yourself in a buyer s position. Would you lose interest in your home when eyeing your decades-old boiler that looks every day of its age? Does your water heater look like it belongs in an antiques shop? Is your house the only one on the block without central air conditioning? If you answered yes to any of the questions above, it s time to consider an energy-efficiency upgrade. Just as you d probably fix the broken fence in your yard or plant some shrubs in front of your home to attract lookers, you should do the same indoors. In addition to appearances (and the peace of mind that comes with new equipment), consider this: Replacing your old heating and cooling equipment with Energy Star-labeled equipment can cut your buyer s annual energy bill by almost $200. New technologies that generate improved results include a heat pump hot-water heater that creates the same amount of hot water as a conventional electric water heater but cuts heating expenses up to 62 percent, a great selling point. A state-of-the-art gas boiler can achieve up to 98 percent thermal efficiency versus 70 percent to 80 percent with a conventional boiler. WHAT IS ENERGY STAR? Created by the Environmental Protection Agency, Energy Star is a program that sets energy-efficiency standards for many consumer products, such as: Heating, cooling and ventilation equipment Dehumidifiers Water heaters Refrigerators and freezers Dishwashers Clothes washers Consumer electronics Light bulbs While You re at It... Don t forget the kitchen. Cheaper than remodeling, new appliances can create a great face lift and generate meaningful energy savings. Sell Bookmark 8
9 Document Everything. The only thing better than making energy-efficiency improvements is documenting those improvements. That s because much of the work you ve done may be hidden behind walls or are otherwise hard to see, as are the energy and money savings that they generate. This is a selling point for you, though, (see Homeowner Priorities on p. 15) so avoid a last-minute paper chase: Before you put your house on the market, have these documents on hand, and make sure your listing agent presents them to buyers: Findings and recommendations from your home energy evaluation Contracts and paid invoices for energy-efficiency upgrades Before-and-after bills for all utilities for the previous 12 months to show how you ve trimmed your home s operating costs For the buyer, the big benefit of energy efficiency is lower utility bills... Buyers notice comfort. They experience it directly. Demonstrating the features behind their comfort validates their experience. Kathleen Bowen Ha LEED Green Associate American Society of Appraisers What are the biggest missed opportunities for taxpayers when it comes to getting credit for home energy improvements? Taxpayers tend to be poor record keepers. Receipts for any major improvement that increases the value of your home should be saved and discussed with a tax professional. Whether a tax credit or deduction is allowed shouldn t matter. Major home improvements add to the home s basis (cost), which reduces any capital gains taxes on a future sale of the home. Cindy Hockenberry Research Manager National Association of Tax Professional 9
10 SET. Ready. Set. Sell. How Energy Efficiency Can Help Sell Your Home.
11 What Agents & Appraisers Don t Do. After you ve done everything you can to make your home more energy-efficient, you re ready to put it on the market. You should shop for a listing agent who knows how to make the most out of the added value you ve created for the next owner of your house and for an appraiser who knows how to quantify that value. Not every agent understands what s involved in making a home energy-efficient and the significance of energy efficiency. And, if that s the case, it s likely the agent won t be able to convey any enthusiasm or insights that could help tip a buyer in your direction. So when you re choosing who will sell your property, test potential agents knowledge of energy-saving systems and their excitement about them. POP QUIZ FOR LISTING AGENTS What s the minimum R-value for attic insulation in New England? What s the cost for a utilitysponsored home energy evaluation? How many energy advisors does it take to screw in a CFL? Get the answers on p. 17. Set Bookmark 11
12 Get the Right Agent. You ll want a broker like Craig Foley, chief of energy solutions at RE/MAX Leading Edge. Presented with the 2013 EverGreen award, Foley advises, Hire an agent who can talk the talk. If a listing agent tells you there s no value in energy efficiency, go somewhere else. There s no question that buyers attach value to lower operating costs, mainly utility costs. WILL YOUR AGENT SELL YOUR HOME S EFFICIENCY? Many listing agents and brokers ignore energy-efficient features. In 2013, agents potentially underreported 60 percent of Energy Star home sales. Craig Foley Chief of Energy Solutions RE/MAX Leading Edge Review any ads or marketing material your agent prepares about your home to make sure they highlight features like your solar power system that generates all of your home s power for a fraction of what it used to cost. Set Bookmark 12
13 Inform the Appraiser. If you think an appraiser, generally retained by the buyer s lender, will recognize and evaluate all the energy improvements you ve made, think again. There s a big gap between appraisers, homeowners and the building-performance community, says Kathleen Bowen Ha, a LEED green associate and chapter vice president of the American Society of Appraisers. Most appraisers are not well-trained in how to identify energy-efficiency items. They don t put anything down on the appraisal form in the energy-efficiency field. When the appraiser arrives, be sure to point out the energy-efficiency improvements that have the greatest potential to increase your home s value like energy-efficient windows and a heating and cooling system properly sized for your home. DID YOU KNOW? The ubiquitous Uniform Residential Appraisal Report dedicates just three lines out of six pages to heating and cooling systems and energy efficiency. Source: American Society of Appraisers Homeowners have a right to be in the residence when the appraiser visits, so they can make their points about energy-efficient features to the appraiser directly. Kathleen Bowen Ha LEED Green Associate American Society of Appraisers 13
14 SELL. Ready. Set. Sell. How Energy Efficiency Can Help Sell Your Home.
15 Homeowner Priorities. Now s the time for all your preparation to pay off. Literally. You re ready to show (and show off) your home to potential buyers. Remember: Energy-efficiency improvements are a selling point. Use them as you negotiate. The investments you ve made have lasting value for the new owner of your house. For some, the environmental impact may be the most important. Others may value the charm of a historic home minus old drafts that new insulation has eliminated. Or, lower operating costs may be especially compelling. For example: Homeowner Priorities About Energy Efficiency Air sealing and insulation contribute as much as 20 percent in savings on heating and cooling costs. Comfort/Savings % Compact fluorescent lamps generate 75 percent in energy savings compared to incandescent bulbs. Savings/Comfort Comfort/Environment Top Priority: People Low-flow faucets and showerheads save homeowners between 25 percent and 60 percent on water. Programmable thermostats help cut heating and cooling costs by 5 percent to 15 percent. A solar power system saves up to 25 percent on electric bills and adds $20,000 to the value of a home for each $1,000 in annual energy savings. Savings/Environment Environment/Savings Environment/Comfort N = Next Step Living, Inc. All Rights Reserved 12% Planet When asked to pick their top two priorities, 56 percent of website visitors to the Next Step Living Home Energy Wizard selected comfort and savings. Sell Bookmark 15
16 Best Foot Forward. Just as you ll stage your home with furniture and accessories to show off its spaciousness and structural features, stage your energy improvements too: When the appraiser arrives, be sure to point out the energyefficiency improvements that have the greatest potential to increase your home s value. According to Kathleen Bowen Ha of the American Society of Appraisers, that s quality windows, doors, and an efficient heating and cooling system properly sized to the home. Pull back your drapes or raise the blinds to reveal your sparkling clean, energy-efficient windows. Clear away anything blocking a buyer s view of your newly installed Energy Star -rated furnace, boiler or other appliance. Prepare a packet of documentation showing what energy-efficiency improvements you ve made. (Don t forget the findings and recommendations made by your energy advisor after your home energy evaluation.) LAST BUT NOT LEAST: GOOD AIR QUALITY In general, homeowners should keep their homes clean. Be sure to vacuum. Carpets are a sinkhole for dust, debris and food particles which can promote mold and bacteria growth when combined with moisture and high humidity. Basements should be dehumidified, personal belongings should not be stored directly on the floor or against a wall and as little organic matter as possible should be stored in the basement. Ron Fallon Indoor Air Quality Association 16
17 Interested in Learning More? Energy Tips from Advisors of the Month Energy Tips on the Bright Ideas Blog FAQ: Energy Savings Home Energy Wizard How to Increase the Appraised Value of Your Home, Kathleen Bowen Ha, American Society of Appraisers Indoor Air Quality: What You Don t Know Could Hurt You, Ron Fallon, Indoor Air Quality Association Report of Energy Efficiency, Valuation of High-Performance Homes & Market Transformation on Massachusetts Residential Real Estate 2013, Craig Foley, RE/MAX Leading Edge Tax Benefits of Home Energy Improvements, Cindy Hockenberry, National Association of Tax Professionals ANSWERS TO POP QUIZ (from page 11) In New England, R-38 is the minimum R-value for attic insulation. A home energy evaluation is available at no cost to most Massachusetts ratepayers. The Connecticut Home Energy Solutions assessment costs less than $100. One! And he may install dozens of these highly efficient light bulbs in an hour. Think Your Home Is Energy-Efficient? See What a Home Inspector Says, Frank Lesh, American Society of Home Inspectors 17
18 Taking the Mystery out of Home Energy Efficiency and Solar Power. One of the fastest-growing companies in the country, Next Step Living is the leading provider of wholehome energy solutions. Headquartered in Boston s Innovation District, Next Step Living makes it easy and affordable for people to live in homes with a low environmental impact. A one-stop service provider of informed advice, funding guidance and expert work, Next Step Living partners with more than 400 municipalities, civic organizations, leading corporations and utility companies to deliver energy-efficient and environmentally friendly solutions for better living. Since 2008, Next Step Living has helped almost 100,000 New England homeowners achieve approximately $26 million in energy savings, which is expected to grow to more than $130 million in the next five years. Next Step Living makes our world better. Please visit NextStepLiving.com for more information. Visit HEW, our online Home Energy Wizard. 100,000 More than 400 Largest Leading 95% homes served in New England community, corporate and nonprofit partners home performance contractor in the Northeast provider of whole-home energy solutions of our customers would refer us to others 18
19 NextStepLiving.com Toll-Free:
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