Going green for your next home is not only good for the environment, but it can also save you tons of money on your utility bills in the long run. In fact, many people are updating their home with energy efficient appliances and other green upgrades usually with the added bonus of significant savings on their utility bills.
Most homebuyers are searching for these green homes (in fact, green features are right at the top of the “wants” list for many buyers!), but there can be some big hurdles during their search. Finding and purchasing a green home is certainly easier said than done. Thanks to a variety of issues, it’s more difficult than you would assume to find these homes!
What exactly is the problem?
Although going green has become very trendy, many people have yet to update their home to make it energy efficient. Americans, as a general rule, prefer the instant satisfaction of upfront savings as opposed to savings over a long period of time. Therefore, the number of homes that actually have these updates is limited. Since these homes are in high demand, especially among first time homebuyers, you may find it more difficult to find one of these homes, because the supply just isn’t as strong as the demand.
Energy efficient upgrades increase the value of the home, which means you are going to pay more for a home that has these upgrades. Although the extra savings will typically be made back over time because of the decrease in utility bills, the added upfront cost is pretty significant. Right now, that added cost is coupled with the low supply of homes – which makes these homes even pricier. A recent survey showed that nearly 95% of homebuyers listed energy efficient upgrades on their list of “wants” for their home. Since the supply is far less than the demand, expect to pay quite a bit more for a green home than a home that has not been upgraded!
Unfortunately, appraisers have not yet caught up with green technology. Most appraisers don’t consider energy efficient features when appraising the home and pulling comps in the area. Furthermore, since the technology is relatively new, the research on actual savings may be outdated, incorrect, or inexistent.
How does this affect you?
If the appraiser does not correctly factor in the value of the energy efficient upgrades in the house, both you and the seller may suffer when the home appraisal is sent to your lender.
- Multiple Listing Service
Probably the most challenging and frustrating aspect of buying a green home is actually finding one in the first place! The MLS is where most real estate agents and buyers begin their search, but the MLS has not caught up with the trend of advertising the energy efficiency of homes. Although many new homes automatically come with green features, there is nowhere on the MLS to list the energy efficient features of older homes. Currently, only about 25% of MLS services have an area to list energy efficiency and green features.
Although people are starting to realize the need for this information, the inclusion of this information is not occurring quickly enough to satisfy green shoppers who are stuck searching far and wide!
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