By the Real Estate Lawyer

The real estate market is in its worst shape in decades. Declining home prices, widespread negative equity and legal issues concerning mortgage ownership have brought about a full-scale collapse in residential markets. Optimists point to record-low interest rates and increasing investor enthusiasm for real estate as signs the market is on the rebound. Pessimists highlight the problems in the mortgage market and the unprecedented nature of the collapse as reasons for expecting the decline to continue. Whichever side is right, the key problem for homeowners stuck in a house they want to sell is how to make their home attractive to buyers.

An answer to their dilemma can be found in the so-called “green” movement. As it turns out, making a home more energy efficient has a positive impact on buyers. Energy efficiency can help homeowners sell their homes and move on and has even become a part of a number of different
real estate courses. The trend has even caught the attention of new home builders. KB Home, for example, has come up with a standard it calls the Energy Performance Guide (EPG). (1) Similar to miles per gallon, EPG estimates the monthly utility bill payments and posts the results in all model homes. Lower payments means that the home is more energy efficient. Home builders have started to compete with one another to make new construction green.

The trend is further confirmed by a survey conducted by the National Association of Home Builders (NAHB). The survey reports that 90 percent of home buyers think energy efficiency is very important when looking for homes. (2) A sub-council of NAHB, the National Association of Home Builders Remodelers (NAHBR), recommends several steps for homeowners that will increase energy efficiency. These steps include installing insulation with a high R-value, upgrading to a tankless water heater and updating to a high-efficiency HVAC system. Energy efficiency is a growing concern among consumers. Environmental awareness and saving money are the two biggest reasons driving it.

Insulation

One of the most important projects a homeowner can undertake is to make sure everything is insulated properly. Improper insulation can waste hundreds of dollars per year. Insulation can rot, become moldy or be eaten away by animals living in the attic or walls. Aside from these dangers, it is also important to make sure the right kind of insulation is installed. Building codes often require insulation to have a certain R-value, which measures resistance to heat flow. The higher the R-value, the more effective the insulation.

Tankless Water Heater

These devices are relatively new inventions. A conventional storage water heater can cost up to $450 per year to operate. Twenty percent of the energy use of a home goes to heating water. (3) Tankless water heaters solve this problem by eliminating “standby loss,” which is the energy wasted to maintain a certain temperature in the tank. A tankless water heater connects directly to the outside water supply. When a faucet is opened, the water heater goes to work, and heats the water as it enters the pipes. No water is stored in a tank; the heat is applied when it is needed, saving the homeowner money.

HVAC

This acronym stands for heating, ventilation and air conditioning. An HVAC system provides the homeowner with climate control. This is another area where money is wasted every year. Problems with the HVAC are often related to insulation problems. Leaks in the air ducts, an inefficient gas-fired heater or dirty registers can contribute to wasted energy. Having the duct system cleaned at least once per year will help alleviate this situation. Changing the filters out regularly will also lower energy costs. Having the whole system replaced may be necessary if it has not been updated in a long while. Regular maintenance may be enough to prevent any serious problems.

Conclusion

Upgrades like these make the home more attractive to buyers conscious of minimizing their environmental impact or looking to save money on their bills. Energy efficiency will help sell a home in a market that currently favors buyers. As energy efficiency spreads, the real estate market may start moving again. The homeowner should get copies of their utility bills before and after he upgrades his home. The comparison between the two can prove very attractive to buyers.