New research from Elevate Energy shows that homes with green features like insulation and solar panels sell for a higher price. But many real estate tools still don’t show these features.
Homes with features like energy efficient furnaces, solar panels and insulation, called “high-performing homes,” have obvious benefits for people who occupy them. High-performing homes are typically more comfortable, healthy, and have lower energy bills than average homes.
But even with the benefits, one question from homeowners is always the same: “Are these home improvements worth the cost when I sell the home?”
New research from Elevate Energy in Midwest markets shows that yes, high-performing homes do sell for a higher price in the real estate transaction! But there’s a catch – to sell at their optimal value, these homes need to be properly marketed to homebuyers.
Case Study: Oak Park, IL
Let’s look at Oak Park, a suburb of Chicago, where owners of a 1936 bungalow sold their home in 28 days at a list price 10% higher than homes of similar size, location, and age. How? The home seller’s real estate agent credits this success to the marketing materials that called out the home’s high efficiency features and its Gold Pearl Home Certificate from Pearl Home Certification.
What Are MLSs Missing?
Showcasing a home’s high-performing features helps it sell, but most Multiple Listing Services don’t have data fields to display these features.
A Multiple Listing Service, or MLS, is a tool to help real estate brokers sell their clients’ homes. They are the backbone of the real estate industry, and are missing out on a huge opportunity to help real estate brokers properly showcase homes with high-performing features.
So, how can we ensure these homes are valued properly?
- Homebuyers can (and should!) ask real estate agents about high-performing features and energy costs, even if they are not shown on the MLS listing.
- When green data fields are not available, real estate agents should use the comments section in the MLS listing to draw attention to the verifications and high-performing upgrades made to a home.
- Entities that issue third-party verifications need to create public, searchable databases that show high-performing features.
- MLSs should add industry approved green data fields that allow real estate professionals to document home features.
The Cycle of Market Transformation
As these homes continue to sell for a higher price, it creates a cycle of market transformation where owners upgrade their homes not just for comfort and savings, but also because they can expect to capture the value of these improvements at the time of home sale.
Homebuyers are willing to pay more for high-performing homes – they just need to understand their value first.
Want to learn more about our work with high-performing homes? Read the full appraiser-led analysis and check out our continuing education courses for real estate professionals. Stay up to date with our latest news by subscribing to our newsletter