A Glance at Green Benefits
The U.S. Green Business Council recently reported that single-family homes are responsible for a little over 20% of the country’s greenhouse gas emissions. By living in a green home, people can help reduce the causes of climate change and studies show that more homebuyers are looking to purchase homes that have eco-friendly features.
“We put out a homebuyer and seller survey annually and studies show people are more interested in buying green improved homes,” said Michelle Wardlaw, Public Affairs Associate for the National Association of Realtors. “NAR research has consistently shown that there is a considerable growing market for green homes. Many of the consumers today, we find, want homes that are sensitive to the environment.”
Many who think about going green in a home envision solar panels, but those aren’t the best investment for everyone. With solar panels, a home must be in an area with sufficient sunshine and it must be in a location that is eco-friendly minded.
“Solar Panels require an up-front investment but because they are clearly visible from the street they are likely to command a price premium,” said Matthew E. Kahn, Professor at UCLA Institute of the Environment in the Department of Economics. “In preliminary work using data on home sales in Sacramento County [California] I have found that with all else being equal, that homes with solar panels sell for a 6% higher price.”
If you were selling a home in the Midwest, that probably wouldn’t be the case.
While solar panels are clearly seen by a potential homebuyer, this can be the tip of the iceberg in determining whether a home can offer energy efficient savings.
“While a potential buyer will notice whether the home has a swimming pool or a great kitchen, the home’s energy efficiency and ‘greenness’ is harder to see,” said Kahn. “The seller who owns such a home should recognize this point and make his home’s green features well known.”
There are more inexpensive things a seller can do to make their home green prior to putting a house on the market.
Justin Barnes, a policy analyst for the Database of State Incentives for Renewables & Efficiency, funded by the U.S. Department of Energy, said the easiest green fixes deal with appliance replacements.
“There are all kinds of incentives for these and that makes a home attractive,” he said. “Other measures are cost effective and advisable as well, such as replacing windows and doors and finding ways to insulate the home more effectively.”
Some upgrades have more appeal and return on investment than others. Energy-efficient appliances can reduce monthly utility bills, tankless water heaters mean less time and water wasted waiting for water to warm up, and replacing old furnaces can lower a heating bill.
These eco-friendly upgrades may not be a top priority for most buyers, but when pointing it out, you can pique their interest.
“In terms of resale price maximization, the best green initiatives to help sell hinges on whether potential buyers value energy efficiency and are aware of the home's energy efficiency,” Kahn said. “If the seller believes that his home is highly energy efficient due to his past investments and the architecture of the home, then the seller should produce 12 months of past electricity bills to signal to potential buyers that the home has this added bonus.”
Remember, anytime you need to replace something in your home, it’s an opportunity to make an eco-friendly choice, which can help in the resale value later on.