There are many features that can make a home attractive to a potential buyer—good neighborhood, proximity to schools and grocery shopping, potential for equity-building and modern (or vintage) architecture.
But what about energy savings? This oft-overlooked aspect of the modern era holds great potential for utility savings—which can increase the final sales price of a home and even lead to a faster sale.
The economic benefits of building green may play a major factor in how homes are built—and upgraded—in the future. David Gluck, an agent with Red Oak Realty, has performed several of these upgrades on his own home, and as a former scientist, shed light on some of the less common upgrades seen in “green” building.
“The things you always see are upgraded windows, double-pane windows,” he says. “Insulated attics are pretty common. That’s part of it because the very basics are to protect the shell and keep it from heating up or from cooling down too much, and double-pane windows and insulated walls and attics are a cost effective way to keep your energy costs lower. But then we get to more exotic things like heat pumps for heating and cooling or hot water heat pumps. Those are less frequent.”
Although these “nuts and bolts” details may be less exciting than the savings they generate, they may still play an important role heading into the future of cost optimization for utilities. Gluck believes that customers will be incentivized toward these types of upgrades and building in the future, just by virtue of their long-term savings potential.
Asked what the primary driver is of people choosing these upgrades, he says: “I think it’s economically driven, honestly, because people I’m seeing who are doing it aren’t driven by an ideology other than it just makes economic sense in the long term…my primary motivation for upgrading my own home was financial. And now I’ve got it set up, I pay such a small amount on an annual basis for my energy. I’m so glad that I did it.”
Alexa Kebalo, a REALTOR® at eXp Realty and president-elect of the Connecticut Association of REALTORS®, issued a stark reminder to people seeking to upgrade their homes: not all homes were created the same, and that can play a factor in how upgrades are implemented when seeking to promote their efficiency.
“Our housing stock is much older, so anyone that’s making these types of updates, they have to be cognizant of that and be educated on the opportunities,” she says in reference to Connecticut.
But if there was one thing both agents agreed upon more than anything else, it was the fact that homes with these energy saving features are more attractive because of them, and that would reflect in the home price and time spent on market.
Gluck had the following to say when asked whether prospective buyers would treat his home the same or differently than a home without the energy-efficientc features he’s incorporated into the space.
“I think people would be clamoring over it. I think I would get multiple offers driving very high,” he says. “I’ve got a hot water heat pump, and I paid just over $700 in gas and electric for the entire year last year—and things are very expensive out here for energy. PGE, which is our energy provider here in Northern California, the rates keep going up and up and up.”
Kebalo’s statement mirrored Gluck’s, as she opined that homes with traditional energy provisions would be viewed as the less desirable option, price notwithstanding.
“Let’s say a buyer’s looking at two different houses. One has an old heating system, old windows, old thermostats, no solar, bad insulation or old original insulation, versus you have the thermostats updated, the windows, the doors, the EV charging station. If all things remain the same, a buyer’s going to move toward the house that has all these energy-efficient features.”
Kebalo also advised real estate agents who are looking to make the trend a bigger part of their educational repertoire, stating that agents who are looking to learn more about this market can be a resource for their clients.
“As REALTORS®, we are professionals at helping people buy and sell homes and obtain real property, so we always try to be a resource for our clients. That means I may not be a licensed contractor, but I have a list of licensed contractors I can connect you with. I may not be a solar professional, but I have a solar contact I can connect you with,” she says. “We like to give our clients an idea of things they can strategically do to increase their bottom dollar or to lower the number of days on market the house is being listed for so that they’re able to get the best return on their investment.”
It seems that no matter how you dice it, the green trend in homebuilding is here to stay. The energy efficiency offered and the potential economic incentives at closing can make an impact.
Gluck also mentioned new types of energy efficiencies that may become more prevalent in the future, stating that there are new ways to wire a home that aren’t fully understood by the public just yet.
“I don’t think people really understand the concept yet of the electric house where everything has gone electric, with these high efficiency appliances that are now available. I run everything on electric except for my gas cooktop. Electricity used to be the most expensive way to run your house, and now it’s become the cheapest way, especially if you have solar.”
Although the economic benefits of owning an upgraded home are clear, the barrier to entry can be high when obtaining things like solar panels, or even wind turbines. Kebalo made clear that consumers should still take the appropriate budgetary tact when considering whether to make a move.
“I highly recommend that anyone considering to help with their electricity costs, because it’s a lot of money, is to have someone that’s more like a consultant. And then also really understanding the nuances of that deal that they’re getting, and making sure that whoever they’re working with perhaps even has an additional warranty that can really provide some safety for you moving into the future.”
The bottom line for agents is that getting educated in this area can net you more in negotiations, because energy efficient installations are viewed by the market as an upgrade to a home, from both the buyer and the seller’s perspective.
“I’m pretty happy about the work that I did, saving myself a ton of money every year now,” says Gluck. “I think if I listed a house like mine that had all these upgrades, people would love that because that’s part of your financial calculation.”
