How Can a HERS Energy Rating Help Sell a Home?
Contributed by Jason Dittmer, DwellTek
It is important to state at the outset of this article that I am not a real estate agent, appraiser, or mortgage broker. I am a residential home inspector and a HERS (Home Energy Rating System) energy rater. I have, however, owned a home and had the good fortune to recently sell it. Because of my profession, and recent real estate transaction, I have had the opportunity to talk with many people in the industry and have examined this current market from both sides of the “For Sale” sign, and I believe the solution to all of our problems is the HERS energy rating………. Well, not really, but I think it can help and here is why.
I can speak from experience that selling a house can be a very challenging experience in the current economic climate, not only for the homeowner, but also the listing agent. There are people looking at real estate, but real buyers who are ready to make offers seem to be few and far between. Potential buyers know they are in the power position, they know they can take their time, and they are happy to wait for the seller to drop the price. To make matters worse, sellers in the Park City area know that come October, the chances of a sale on a single-family home decreases significantly. This means they are going to need to hold on to the house during the winter, which as we all know, is the time when our utility bills go up significantly. A listing agent knows that the one suggestion that will help sell the house is also the one thing the seller does not want to hear; “We can lower the asking price.” Well now there is another option.
A HERS energy rating is a great alternative. For those of you that are unfamiliar with an energy rating, it is a standard measurement of a home’s energy efficiency. Diagnostic tests are conducted on the home to evaluate the structure’s energy efficiency and pinpoint specific, cost-effective improvements. The data gathered by the Rater is translated into a score between 1 and 150, and is then equated to a star rating ranging from one star for a very inefficient home, to five stars for a highly efficient home. Unlike an energy audit or a weatherization assessment, a HERS energy rating is a recognized tool in the mortgage industry. This means that the generated reports can be used by the seller to facilitate financing certain energy efficient improvements, or they can be used by potential buyers to help qualify them for Energy Efficiency Mortgage Products.
Think about that. What if every person that looked at the house was informed that an energy rating had been performed, and that the buyer of this house could qualify for an Energy Improvement Mortgage (EIM). Simply put, this would allow them to qualify for a larger mortgage to make their dream home more energy efficient. I think most real estate agents would agree that this could be a very powerful tool. More importantly, should the homeowner move forward with the recommended improvements, they will be taking steps toward lowering their utility bills, as well as separating their home from other listings.
The Appraisal Journal came out with a study which stated that when energy improvements were made on a home, the value of the home increased $20 for every dollar of annual energy savings. Granite countertops, a fresh coat of paint, or hardwood floors cannot do that.
More than anything, a HERS energy rating shows both proactivity and creativity on the part of the listing agent, something that is appreciated by buyers and sellers alike. So while a HERS energy rating may not be the magic elixir that solves the world’s economic woes, I believe it is a step toward making homes more valuable and affordable to sellers, and more accessible and attractive to buyers. Oh, and did I mention it’s also good for the environment? Jason Dittmer, DwellTek email Jason
Tags: energy efficiency, HERS Home Energy Rating System, Park City Real Estate, real estate inspection
