Most home buyers are interested in purchasing a house with energy efficient features. Not only can a “green” property help you save money over time, but it cuts back on your family’s carbon footprint and assists in the fight against global warming. However, MLS listing services, the traditional way that both buyers and Realtors search for potential properties, do not have a specific place to list green features. In addition, most appraisers do not have a good understanding of how valuable various green features are worth and therefore do not include them in their report. This is a significant problem for both buyers and sellers.
The importance of energy efficient features
Recent studies have documented exactly how important green features are to prospective buyers. One report indicated that close to 95 percent of more than 3000 respondents valued Energy Star appliances highly in their search for the perfect home. Those same individuals were prepared to pay approximately $7,000 more for a home that included energy efficient features, as long as they could bring down their utility bills by about a thousand dollars a year. In addition to appliances, Energy Star has a variety of products that range from doors and windows to heating and cooling systems; all of these products are known to increase the value of a home.
Although new homes usually provide data for buyers on their energy ratings and certifications, previously owned homes generally do not have that information available. MLS systems, which are used by a large number of real estate agents and buyers to narrow down their home search, don’t include a lot of information about energy efficient features. There are approximately 850 different MLS services across the country, but only about 25 percent of them have an area where green features can be listed. While change is happening, and systems are beginning to include more information, it is not occurring at a very fast rate.
The flaw with appraisals
One of the first things an appraiser does when determining the value of your property is to pull information about comparable homes that were recently sold in the area. Because of the issue with the MLS systems, appraisers have no way of knowing whether or not a “comparable” property has green features. In addition, most appraisers don’t understand how much value energy efficient appliances or heating and cooling systems can add to a home. As a result, both buyers and sellers suffer when the appraisal is sent on to a lender.
Sellers with an energy efficient home need to impress upon their Realtor the importance of highlighting the property’s green features in the MLS listing. In addition, ask the appraiser who comes out to your home to use a green addendum, which was released by the Appraisal Institute and helps bring attention to the environmentally friendly features of a home. Finally, check to be sure the appraiser has evaluated a green home before they come out to your house.