Green-home premium requires savvy Realtor
Kenneth R. Harney
WASHINGTON — If you make extensive energy-conservation and other green improvements to your home, will they earn you a premium price for the entire house when you go to sell?
For years, the easy answer has been, oh yeah, absolutely: Green is good, everybody knows that saving energy is a no-brainer, and buyers will pay more to get it.
There’s research to back that up.
A study of California sales found that greencertified homes sold for between 2.1 percent and 5.3 percent more than similar homes with minimal or no green features.
A 2015 study of renovated homes in Washington, D.C., concluded the average price premium was around 3.46 percent.
A study last year in Texas found that green-certified homes sold for 8 percent more than comparable properties.
Homebuilders have told researchers that two-thirds of their customers say they’re willing to pay more for homes with significant green features, including energy-efficient appliances, heavy-duty insulation, water conservation and healthy indoor air quality.
So is that it? Going green always nets you more green — case closed?
Not so fast. Two recent studies by appraisers with long experience valuing green homes suggest the answer is more nuanced. Some of the researchers’ findings in brief: Though generally it’s true that green improvements will earn you at least a little higher price, the size of the premium might depend on external factors you hadn’t thought about:
• Does the Realtor you picked to list your home know enough about green improvements to market them effectively? Is the agent competent to market what you’ve got to sell?
• Does the agent have any formal training in this area, evidenced by a green designation in her or his listing presentation or advertising?
• Does the listing for your home in the local Multiple Listing Service (MLS) contain crucial information about your green improvements, such as a “green addendum” that details the features that make it energy-efficient?
• Do Realtors in the area know much or anything about rating systems such as HERS, LEED, Energy Star or others? Do they know where to turn locally to obtain a rating? (HERS stands for Home Energy Rating System; LEED is a globally recognized rating system for residential and commercial green real estate; Energy Star is a federally developed rating for appliances, building materials, entire houses and commercial property.)
If none of these key factors is working for you, your green features might be impressive, but might not earn you much of a premium. Worst case, they might get you nothing.