Real Estate Agents
This website is designed to act as a resource for you, the real estate agent, concerning green and energy efficient homes so that you are then able to give informed sales and purchases opinions to your clients. Key to your business is accurately advising your clients on the market value of their home.
Is green worth more?
So is a green and energy efficient home worth more? Analysis of the NWMLS sales data in Washington and the RMLS in Oregon, show premiums are clearly being paid for these types of homes and the time on market is generally less.
• For the most current analysis of the following sectors, Seattle, King County, Snohomish County, Pierce County, Kitsap and Thurston Counties in WA go to GreenWorks Realty’s e-cert reports
• For the most current reports on the greater metropolitan of Portland, Oregon go to: http://www.earthadvantage.org/uploads/CertifedHomesCommandPremium.pdf
But is this true of all markets analyzed? And if not, why not? A deeper inspection of the data, along with a number of market research studies (see below) reveals a number of interesting probabilities/lessons to be learned for professionals within the green building industry.
- Why are green homes in Seattle and King County showing consistent premiums and less time on market? It would appear the more urban the market the greater the sophistication (awareness of environmental issues as well as exposure to information on green building) of the consumer. When consumers are educated, or presented with information on green that makes sense to them financially, typically they will choose green and energy efficient homes. Two of the reports below clearly show there is a direct correlation between realtor knowledge of green building, and effective communication and marketing of its features and benefits and the premium achieved for the home. This point was also corroborated in the Agent Interviews section of all three case studies (see below CASE STUDIES).
- Homes are achieving premiums in other counties in WA, but are taking much longer to sell. Why? Since market share in the counties of Thurston, Pierce, Kitsap and Snohomish is considerably less than in Seattle and King county, it’s reasonable to assume these are less sophisticated (i.e. less informed) markets, not only from the consumer perspective, but also from those involved in delivering and marketing this product. The analysis of sales in Pierce County in Feb 2010 dramatically illustrates this point. The median certified home was 10.8% larger than the median conventional home, was almost 10% more expensive and took almost a month longer to sell. The key concept of green, to build smaller to conserve resources, was obviously not understood. Instead the concept of ‘if green gets a premium, then more green is surely better’ was instead embraced.
- Perhaps the greatest lesson for the real estate community implicit in the story of premiums being paid for green
homes is the following. That the market (consumer) as it grows in its level of education is fully embracing green homes (i.e. is willing to pay more for homes demonstrating these qualities). The longer term issue then revolves around how the construction industry should treat this premium as market share increases. To apply the premium for green or discount the premium for non-green? This will largely be decided when ‘a new norm has been established’. The old paradigm of ‘more is better’ is counter-indicative to green building. The new paradigm is to build more durable, more resource efficient, SMALLER homes. As this market develops real estate agents will need to change their advice to builders that what sells consumers is more square footage, because the data is starting to tell a different story.
Regional Reports
- Built Green & LEED – A Comparative Analysis by City of Seattle and King County GreenTools November 2008 – an analysis between Built Green, a local rating system, and LEED (Leadership in Energy and Environmental Design), a national rating system, for single family and multifamily projects at LEED Silver and Gold and at Built Green 4 & 5 star.
- Built Green Value Analysis by Gardner Johnson January 2009 – examines in State of Washington environmental certifications’ effects on the values and consumer preferences for green residential housing units.
- Built Green Consumer Survey by Robinson Research March 2009 – a telephone survey among households in the State of Washington. The overall purpose of this study was to evaluate the public’s attitudes and perceptions regarding green building practices.
- Green Building Marketing Analysis (Five Counties, Western WA) by Hamilton Investments April 2009 – examines the effects of marketing on premiums achieved for green homes.
Case Studies
These highlighted case studies contain valuable marketing insights for the agent when selling green homes. They also contain a precised version of an appraisal that was conducted on selected homes or units, which in all three instances identified premiums were paid for the green features.
The case studies were conducted as part of an overall initiative in the Cascadia region between 2007-2009 to investigate the hypothesis of the market paying premiums for green buildings. For a detailed account of the Green Building Value Initiative, including findings of the first analysis work of sales data tracked for certified green homes through Oregon’s Regional Multiple Listing Service and Washington’s Northwest Multiple Listing Service, see Valuation and Sustainability.
Education Courses for real estate agents available in WA providing specific local market information
All the reports and studies are pointing to education. As a realtor, you cannot hope to competently represent a future client if they are either buying or selling a green home, if you do not understand the specifics of this sector. Your lack of knowledge or your skill in marketing green and energy efficient new homes and retrofits will affect the sales price achieved. SEEC will be offering wholesale its Green Agent Essentials course through organizations and groups and has set its schedule for Understanding Green Home Appraising for real estate agents through to the end of 2010. Click the links below to go to detailed descriptions of the courses and to register. However, other course offerings providing excellent green building information and sound local market information are also listed below.
Green Agent Essentials - Completion of this course allows students to then take the Built Green Certified Profesional: Real Estate exam - 14 Clock Hours $150 wholesale price to organizations
Understanding Green Home Appraising – 7 Clock Hours $60
Built Green RE Pro – Completion of this course allows students to then take the Built Green Certified Profesional: Real Estate exam – 18 Clock Hours $300
Interested real estate professionals should contact the Built Green® staff person at their local HBA to find out when the course will be offered. For more information on HBA’S offering Built Green® programs as well as this class go to www.builtgreenwashington.org.
North Seattle Community College RES 130 On Campus – Completion of this course allows students to then take the Built Green Certified Profesional: Real Estate exam - 30 Clock Hours 3 credits $261
The North Seattle Community College’s Green Real Estate Certificate is one of the most comprehensive introductory green real estate training offered anywhere. The introduction course, RES 130 Green Real Estate, is a 30 clock-hour approved, 8 week course designed to introduce agents, appraisers, homeowners, and contractors alike, to the emerging green building phenomenon.
The on-campus course, offered in the Fall beginning in September, includes class lectures by Built Green® Pioneer Award Winner, Cate O’dahl codahl@sccd.ctc.edu, field trips to green building suppliers and high-performance green building projects; and expert guest lecturers that have qualified experience in the field and can offer students an opportunity to expand on subject-specific information, such as indoor air quality and green remodeling.
North Seattle Community College RES 130 DL Online class
30 Clock Hours 3 credits $282
The Online course is under development and is expected to be released in Spring (April) 2011. Check out the NSCC website for details https://northseattle.edu/certificates/green-real-estate-certificate Real Estate and the Appraisal Process
The Home Valuation Code of Conduct
With the introduction of the Home Valuation Code of Conduct (HVCC), many real estate agents are confused as to how, or if at all, they can interact with appraisers. To be clear, the HVCC probihits any conversations regarding the value of the property with anyone other than the client. However, the agent should provide clear details on all of the amenities of the property and particularly in the case of a green home be prepared to discuss in detail the features and benefits. Additional pertinent market information, such as an agent’s own identification of premiums being paid for green and/or energy efficient homes in their local market, should be provided to the appraiser.
For specific information on Green Home Appraising as it pertains to real estate agents go to the following three video shorts.
For a thorough overview of the challenges and constraints facing appraisers in how they appraise green and energy efficient homes and retrofits, it is suggested interested visitors should read all of the Valuation Topics.
Why a Green MLS?
The ability to analyze the sales performance of green and energy efficient homes as a sector, as well as to be able to identify and search for these types of homes, is crucial for the real estate professional. Until 2007 when Oregon and Washington’s multiple listing services were the first in the country to incorporate environmental check boxes on their input forms, there was no way to virtually find these homes. The impact of this fact on the appraisal process in particular, for regions with growing residential green building markets, cannot be underestimated.
The importance for appraisers to easily identify comparables when valuing green and/or energy efficient homes is furthr highlighted by the recent national release of The Green MLS Toolkit, initiated by the National Association of REALTORS and NAR’s Green Resource Council, in conjunction with the National Association of Home Builders (NAHB) and the Appraisal Institute. While this is only a recommendation to multiple listing services, it is an important first step that recognizes appraisers are currently working blind when valuing green and/or energy efficient homes and important sales data is going under the radar for real estate analysts.
An important point to be made here is the responsibility this lays on agents to accurately input information. If you are not educated on the specifics of green and energy efficient homes and retrofits, how will you know to identify such features?
