Explaination of the home performance disclosure

I believe that it is critical to educate in the process of buying and selling real estate. It is my belief that there is a big difference between new construction and existing construction. Here are some facts: We as a society have been learning how to build more energy efficient houses since the 70’s. Codes have increased requirement for insulation as time has passed and our technologies for heating and cooling have improved. Green building programs that have a third party certified energy piece to them look to perform better than current code. Codes are different in every state.

I am pointing this out because there is a national discussion about requiring energy audits on homes. I believe this is really only necessary for new construction. It is obvious to most people that a newer home performs better than an older home. Energy audits let the builder know that they did the work correctly.

I do have a proposal about how to handle educating the general public regarding the code changes and home performance. The proposal is as follows: Require a home performance disclosure for real estate transactions. The disclosure would detail when the codes started to require the use of insulation and other energy related measures, It would state what tax credits are available for the consumer to update their home, It would also state that there are free energy audits available and state that the consumer can opt to have an energy audit.

My proposal~ A building code informative disclosure

I propose having another form that can be used to educate people in the process of dealing with real estate.

The form would disclose the fact that building codes did not require insulation until 1977. The building codes have changed increased the amount of insulation progressively over the years. Energy star home of a given year have more insulation than another house built in the same year.

To make this a little bit more real to people perhaps someone could do a study on what that means and include that as well.

The form should also say that free energy audit can be received from Energy Trust with their contact information.

For additional info re the Green Proposal see the link below

http://blog.oregonlive.com/pdxgreen/2007/11/portland_leaders_unveil_carbon.html

Please see the polling on the right hand side of my blog. Be heard on this issue

Energy Audit on every real estate transaction??

This is the proposed mandate
A second key component of the green building proposal is intended to provide better information to building owners, managers, tenants, and prospective buyers about building performance, improving the information available to the real estate marketplace. A building performance rating would be required for all commercial and residential buildings, either at time of sale or lease, or else by a specific future date. “We are seeing more and more people looking to buy green buildings, not only because they have fewer negative impacts on the environment, but also because they are better spaces for people to live and work in, and provide long-term financial benefits,”
(to see the whole proposal see http://www.portlandonline.com/osd/index.cfm?a=173800&c=44851)

I think the intention of the proposal is wonderful. It is to educate the consumer about the energy consumption of a building.

Here are the issues I see with this:

I have had trouble finding people to do this until very recently. I don't think there are enough auditors to impliment this.

The people that I have spoken with charge around 500 dollars to do the test. Wouldn't that money be better spent by buying an energy star appliance or a tankless hot water heater?

Some senerios:

What if a person is selling the house because they can’t afford the house? They are foreclosing. What if the buyer is a first time home buyer and has stretched to purchase the home? Who is going to pay for this test? The buyer already has to put out money to do an oil tank locate and for an inspection and for a sewer scope. I am sure that the banks aren’t going to want to fund these audits.

What about the senerio where your nest egg is a fourplex that you rent out. Because you are a good citizen, you pay to have the audit done. Finally it is rented out. Six months go by and the renter decides to move. There you are required to get another test before you can rent again…. Hmmm

this is what happened last time we tried mandating audits

see a renet discussion
http://resnet.us/standards/mortgage/amendments/comments.aspx?SeriesID=6

see a study about the previous use of mandated audits

http://www.homeenergy.org/archive/hem.dis.anl.gov/eehem/98/980711.html

Take the polls on the right hand side of my blog -OR- comment

RMLS green value

I knew there was a green factor not being accounted for.

One of the reasons that I proposed the greening of the MLS is because I used to work for a developer, as an architect. I noticed that my arguements worked best if I could quantify it in terms of dollars. As a realtor, I noticed that greener homes weren't getting the value they deserved, hence my work greening the MLS. Here I am. Proven correct.

This is the email I got from earth advantage prior to press release

“Green” Certified Homes Sell for More in Portland Real Estate Market
Certified Homes Also Sit on Market for Less Time Aligning with Consumer’s Values and Higher Demand for “Green”

PORTLAND, OR – The growth in the number of “green” certified homes in the Portland metro region is attracting some significant attention. Over the past year, three percent of all new homes sold in the Portland Metropolitan Area carried a sustainable or “green” certification brand. These homes earned more in the market than non-certified homes, selling for an average price of $223 per square foot, versus $185 per square foot for non-certified, traditionally built homes.

This information was compiled by the Regional Multiple Listing Service (RMLS) in Portland. The percentage quoted includes new home sales in Multnomah, Clackamas, Columbia, Washington and Yamhill Counties. It does not include new home sales in Clark County, WA. RMLS began tracking the sale of green certified homes in 2007 when the certification search feature was implemented on the MLS database.

“Green” certified homes also sold faster than homes without certification. New “green” homes in the Portland Metro Area remained on the market for just of 66 days on average, while the average time on the market for all homes was 73 days. The announcement of Countrywide’s Green Incentive mortgage product that discounts the interest rate is sure to add further value to green homes.

“These findings are very important,” states Sean Penrith, Executive Director of the not-for-profit Earth Advantage, Inc. “We have long heard and touted that green building is the right thing to do, and it is. But now we have actual data that points to higher value for green homes and reduced time on the market. This is the tipping point, and in five years, builders that are not identifying green in their practices will undoubtedly be marginalized.”

“Green” certification includes third-party certified Earth Advantage® homes, Earth Advantage/ENERGY STAR® co-labeled homes, ENERGY STAR, and LEED® for Homes. For the period ending April 30, 2008, 309 housing units in the study received either Earth Advantage or an Earth Advantage/ ENERGY STAR certification. To obtain third-party certification, a builder or developer works with Earth Advantage, Inc to ensure that the highest standards for energy efficiency, indoor air quality, resource efficiency, water conservation and environmental responsibility are integrated into the construction of the home. Final performance testing and inspections are conducted by Earth Advantage, Inc. before a certificate of compliance is issued.

Home builders in the region are offering “green” or sustainable amenities as a way to compete in the housing market. Such features include efficient home furnaces and high performance heating and ventilation systems. Steve Tapio is the Building Science Team Leader for New Tradition Homes in Vancouver. His company began offering Earth Advantage certified homes in 2005. “All builders need to be in the running now,” Tapio reported. “The cost of energy is one of the largest concerns on the consumer’s mind. Sustainable features are also of interest in this market.”

“Green” built homes are designed with people in mind. They are more energy efficient reducing monthly utility costs, have healthier indoor in qualities that are better for occupants, and have more durable features and products that reduce time and money for upkeep. People are acknowledging these traits as not only core values to themselves, but are also beginning to understand how “green” built homes truly make sense, from an economic and environmental perspective.

green MLS sytems

I am the realtor that spearheaded greening the MLS systems in the United states. I is something that I see as a critical piece in the buying and selling of real estate. You can't give value to something that data isn't being taken about.

For information on the history of my project I have included a link:



http://karlenzig.typepad.com/karlenzig/2006/09/portland_first_.html