The Department of Energy has initiated a new drive to make builders, real estate agents and lenders more aware of the value of energy efficient homes, hoping those professionals will appreciate the savings enough to promote them to their clients and customers.

While there have been successes in partnering with builders, working with real estate agents has been harder.

At least part of the problem is that the average agent doesn’t know how to market an energy efficient home differently from any other home. Also begged is the question of whether the marketplace would actually support a price differential.

Mark Ginsberg, with the breath-taking title of Deputy Assistant Secretary for Building Technology State and Community Programs, says the DOE is aware of the information gap and is working on it.

"This has been a weakness in the program," he says. "Asset values should go up when energy efficient features are there. Utility costs go down. That should mean more money available to help make the mortgage payment.

"The ideal would be for the (real estate agent) to incorporate it into his negotiating strategy. ‘This house should sell for more because it is going to save the buyer $15,000 over the next 30 years.’ But what we actually hear from agents is ‘that sort of statement has a complicating effect’ on the negotiations. It has the effect of ‘slowing down’ the negotiations."

According to the DOE the average home spends an average of $1,300 per year on energy costs. Typically, those costs are spread:

-- 44 percent for home heating and cooling.
-- 33 percent lighting, cooking and other appliances.
-- 14 percent for water heating.
-- 9 percent for refrigeration.

For energy conscious homeowners, however, enjoying the savings of energy-efficient features often is dampened by the failure to realize an increase in a home’s resale value. The idea, however, may be starting to catch on.

John Stovall, head of the national Real Estate Educators Association, says he is comfortable that a growing number of brokers and agents understand the difference between quality homes and inefficient homes, and believes that efficient homes are demanding, and getting, premium prices.

"I know agents here get some of that training in pre-license courses," said Stovall, who is based in Denver. "And there appears to be some evidence that (agents) are noticing the differences and, more importantly, that appraisers do actually consider ‘energy efficiency’ to have a value.

"And we are seeing some evidence that lenders are acknowledging the advantage of energy efficient homes. We’re seeing some ratios in a couple of loan programs balanced in favor of efficient homes. Lenders see that those homeowners who are putting out less for utility costs are going to have more cash."

He emphasizes, however, "we are not seeing big dollar differences. Some dollars, yes, but not a huge dollars."

Still, he said, he believes agents are better off urging homesellers to have their homes energy rated.

"Utility companies here (and in many other states) have Energy Star rating systems," he said. "A power company employee will come out to the house -- usually for nothing -- and will inspect it and give the home a rating. I’ve seen those ratings used to help market properties."

The DOE is enlisting hundreds of companies -- including manufacturers, home builders, real estate companies and lenders -- to become partners in energy efficiency. Ginsberg said he hoped much of the needed education would go through those companies.

"Fannie Mae has a $15,000 loan package to help buyers make their homes energy efficient," Ginsberg said. "In some new homes, some builders are guaranteeing their homes are 50 percent more efficient than the model energy code. In some areas builders are guaranteeing consumers will spend less than a dollar a day on energy costs."

Ultimately, Ginsberg said, the market will demand efficiency and brokers and agents will have to get up to speed on how to sell those efficiencies.

For more information contact the DOE at: 1 800800 doe 3732.

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Published: August 6, 1999

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