Increasing use of term "energy efficienct" used in real estate agents marketing of homes...

When a listing agent enters information into their MLS to market a property, there are a number of fields that they can use as a quick reference guide for a potential home buyer. These fields include items such as square footage of the lot and home (often times auto-populated from a tax record database) the number of rooms, bedrooms and baths. Fields may even extend to green features -  green certification of a home (LEED, NGBS) or if the homeowner/developer has had HERS Score completed on the property are becoming more coming in MLSs.

MLSs also have a remarks section where the listing agent is able to describe the home and its features in more detail than just the fields. The remarks section is what most home buyers view when the go to Zillow, Trulia or Realtor.com - the description of the property and its features was entered into the MLS.

Times "energy efficient" used in MLS PIN 2011-2015

Real estate agents are becoming increasingly aware of the benefits of a home with lower operating costs. A thorough review of the total cost of home ownership should include not only principal, interest, taxes, and insurance, but utility and transportation costs as well as upkeep.

MLS PIN #s HERS Ratings and Net Zero Homes

In 2015 MLS PIN, the largest multiple listing service in the state of MA, updated their green data fields. Data base fields in the MLS are the central nervous system of the real estate transaction. The fields are used by consumers searching for specific features different homes offer, and by appraisers searching for accurate sold comps to establish valuation. Accuracy of the fields is essential for a healthy marketplace.

In April, 2015 MLS PIN added the last field of the 16 upgrades to their green data list: the HERS Index Score. A HERS rating is a rigorous third party verified evaluation of the home's energy efficiency. The U.S. Dept. of Energy estimates a typical existing home to have a HERS score of 130-140. New construction homes modeled from the IECC 2006 building code rates at 100 (like your golf score the lower the better with your HERS score). In order for new construction in MA stretch code communities, a home must reach HERS scores between 65-70 depending on the gross living area of the home. LEED Platinum homes many times reach HERS scores in the 30's - and, the holy grail of building science is a HERS score of 0. Net zero homes include some source of energy production on the end user side of the meter (in MA solar PV is the typical choice). The energy production coupled with an extremely efficient design produces homes that produce as much energy as the use on an annual basis, hence the term net zero.

Reviewing the 2016 numbers to date in MLS PIN: 305 single family homes were listed with a HERS Index Score field entered. Of these 55 single family homes indicated the home had a HERS Score of 0 - the holy grail of building science.

In order for a home to reach net zero it must be utilizing some type energy production on site. Of the 55 homes that said their homes had a HERS Index Score of 0 only two had any evidence of solar PV in the pictures or remarks and one indicated the home had geothermal (this home also was marketed with rigorous R-45 wall and R-65 ceiling insulation).

Of the 55 homes listed with a HERS Index Score 40 were built in 2015-16. 18 were marketed as Energy Star Certified, 2 as LEED certified and 1 was NGBS certified.

I also did a key word search of "net zero" and 11 additional properties were marketed using the term, none of which used the HERS Index Score data field in MLS PIN. Ten of these properties were built in 2015-16, and nine of the properties indicated they were "net zero ready" if the buyer purchased a solar package with the new construction.

TAKEAWAYS:

1) It is clear that many listing brokers are confused about what a HERS Index Score is, and what the score means.

2) The misinformation could lead to significant distortion of the high performance home market as appraisers look for accurate comps.

3) Agents using inappropriate HERS Index Scores could be accused of greenwashing.

4) More real estate industry education on this subject is needed.

#s from my FB Ad

Just did a massive $30 ad campaign on Facebook, lol. Here are the numbers by gender and age of responses. I found it interesting...

                     People reached                  Clicks to website

W                         1828                                   20

M                          1321                                   14

Unknown               27                                     0

 

Ages

18-24                     22%                                

25-34                    12%

35-44                    9%

45-54                   14%

55-64                  24%

65+                      18%

Clicks to website percentage 18-24 21%, 55-64 27%, 65+ 27% - 75% of clicks to the website were in the outer ends of the age brackets. You can find my FB page at: www.facebook.com/SustainableRealEstateConsultingServicesbtw

 

Under-reporting of Green Certified Properties in the MLS

In Massachusetts, we are fortunate to have one of the top ten multiple listing services (MLS), the data base that real estate agents use to market home features.  Multiple Listing Service Property Information Network (MLS PIN) located in Shrewsbury, Massachusetts (MLS PIN) was one of the first MLSs to adopt green fields in 2009. These fields support high-performance home features.

MLS PIN’s green data fields include several fields for listing agents bringing a high-performance home to market. For a developer that has hired a real estate agent to bring their HPH to market, it is critical that the listing agent accurately enter all of the homes features in the data base. Inaccurate representation of a home’s green features are problematic for a variety of reasons. Over stating the homes energy features is known as ‘green-washing’ and opens all of the parties in the transaction to potential litigation; under-reporting of the homes green features is marketing opportunity lost to a growing audience of home buyers searching the data base for energy efficient homes built with sustainable products.  Under-reporting of data also can make valuing the home accurately by real estate appraisers and underwriters a challenge.

In my 2014 report on the MA HPH marketplace, I discovered evidence that both under-reporting and over-reporting of a home’s green features was prevalent in Massachusetts real estate sales of 2013.

MLS PIN offers a listing agent an opportunity to note a home that was certified by third party institutions like LEED. By checking a box in the MLS an agent can indicate if a home has been green certified.

I first discovered there might be a problem of under-reporting when I was searching green certified condos for a buyer in 2013. When I searched for available green condos, I realized that there were LEED certified condos not appearing in the MLS, although I knew that they were LEED certified condos in the price range and area that my buyer was interested in. I decided to investigate this issue more closely for my 2013 report.

I discovered that there was evidence that supports for every one green certified single-family home accurately recorded in Massachusetts in 2013, 1.5 single family homes were under-reported. For condominiums sales, evidence of accurate reporting by listing agents was even worse, for every one condo accurately recorded two were not. The evidence was clear that real estate agents were unaware of the tools their MLS gave them to market properties to buyers.

There was also evidence that the MLS PIN data field ‘Solar Features’ was over used by listing agents. Evidence suggests that this field may have been inappropriately used 39% of the time in 2013, up from 28% that I reported in my 2012 study.

 

What the stats tell us...

I have been studying the emerging high-performance home market for several years. The numbers have been impressive. In Massachusetts we have seen an explosive growth of solar panels on homeowners rooftops in the last few years. The states largest multiple listing service has an impressive array of green data fields that real estate agents can use to market homes that have HERS Index Scores or green certifications like LEED. Data around consumer demand for homes that are more energy efficient and healthier to live in and how the real estate industry may or may not be supporting demand is evident.

I have also spent time in my advocacy work to talk about the opportunity the real estate industry has to be part of a solution for the energy and environmental challenges that we face. In the U.S. almost 40% of total energy consumption can be attributed to the buildings that we live and work in; in Massachusetts the number is higher - 50%. The inevitability of a deeper intersection between the real estate and energy industries is very clear to me.

This blog will explore both the opportunities and the challenges the real estate industry faces in supporting market transformation of buildings that are more energy efficient and healthier to live in...

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