Making the Invisible Visible: Valuing Energy Efficiency Improvements in a Real Estate Transaction

Often, when homeowners make improvements to an existing house, the most important aspects of home performance – including safety, comfort, energy efficiency, durability, and environmental impact – are literally invisible during key steps of any home sale or refinance transaction.

One result is that energy efficiency investments are overlooked or inaccurately valued at the time of a home sale. The key to making these investments visible to everyone involved in a home sale – including appraisers, Realtors®, buyers, and sellers – is standardized documentation and consistent communication across the energy efficiency and real estate industries.

new paper from CNT Energy and National Home Performance Council shows how proper documentation, verification, and standardization of energy efficiency improvements can add value to a home that owners can recoup at sale.

The paper provides a blueprint and outlines seven steps the energy efficiency industry must take to unlock the value of efficiency in the real estate market:

Unlocking the Value of an Energy Efficient Home

  1. Consistently document energy efficiency improvements
  2. Ensure data is incorporated into the appraisal process
  3. Work with the real estate community to reflect these improvements in local for-sale listings
  4. Capitalize on existing education and training opportunities
  5. Report on the growing inventories of energy efficient homes
  6. Develop standardized IT solutions
  7. Work with partner financial institutions

The outcome is that energy efficient features become visible and can be accurately valued when a home is sold. This lays the groundwork for a virtuous cycle in which homeowners are eager to invest in energy efficiency improvements because they know that they can recover some or all of their investments at the time of the home sale.

The full paper is available online at  www.cntenergy.org/media/Unlocking_Value_2013.pdf

- Melissa Ulbricht

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