When a Needham town house hit the market in March of 2013, the new property had lots of appeal: plenty of living space, a fenced-in yard, garage parking, ceramic tile, granite countertops, all in a great location. But those items weren’t the biggest attraction: loaded with energy efficient features, future occupants could look forward to low utility bills, efficient cooling and heating, and smart, healthy living.
Seventeen days after being listed, the town home was under agreement at asking price. Kimberly Le, Renewable Energy Professional and REALTOR® in the Boston area, wasn’t surprised.
“There were two
units for sale in the town home, and both sold easily,” recalls Le, who met with the potential buyers. “One came from New Hampshire specifically looking for a high performance home. The other wasn’t looking for high performance, but it just made the property that much more appealing.”
High performance homes – those packed with the latest in environmentally friendly, energy-saving features – have been gaining recognition across the Bay State. While the incentive for owning these homes should speak for itself – lower utility bills, healthier living, less impact on the planet – many consumers remain unaware, and when comparing similar properties, focus mainly on up front cost. Becoming skilled in this emerging market and developing strategies to reach these customers can greatly
expand any REALTOR'S® potential. The Rise of Green Homes
Since the first celebration of Earth Day in 1970, environmental awareness has maintained a firm hold across the United States. The creation of regulating agencies in the early 1990’s, including ENERGY STAR® and the US Green Building Council, solidified the importance of energy efficient living.
Today’s market for homes with minimal drain on energy and natural resources remains strong. A study released in 2014 by McGraw-Hill Construction, done in conjunction with the National Association of Home Builders, paints an optimistic future: green construction represented 23% of the overall residential construction market in 2013, and that number is anticipated to rise to between 26% and 33% of the market by 2016.
The study also shows that consumer’s reception is growing; 51% of builders and remodelers claim it is easier to market green homes, a figure up from 46% in 2012 and 40% in 2008. And buyers aren’t shying away from the cost: 68% of builders (up from 61% in 2011) report their customers will pay more for green.
Local interest is equally optimistic. According to a report published by RE/MAX Leading Edge and authored by Craig Foley, chief of energy solutions at RE/MAX Leading Edge, Massachusetts saw a 110% increase in green certified single-family home sales from 2012 to 2013.
“I feel the 110% jump is something that we’ll see for the next several years,” says Foley. “There’s a lot of opportunity in this emerging market. REALTORS® currently have an incredible opportunity to be part of the long-term solution, to make a difference.” Raise Consumer Awareness
Consumer familiarity with energy efficient technology varies greatly; some will arrive in your office fully versed in the latest news and products, while others are indifferent and quick to balk at price variances.
Kimberly Le feels it’s a REALTORS'® responsibility to help shift customer’s thinking.
“Often, buyers don’t know what to ask for. Agents should be the ones to bring up these features – to tell customers what’s out there and generate interest,” says Le, who says she likes to engage her customers in pointed conversations.
“I’ll ask them ‘How much do you pay for utilities? Do you want to pay less? Does it matter to you what energy source it comes from?’ ” she states. In most cases, Le says the customer is interested in learning about the savings potential, especially once you show them numbers.
“If you can show them their projected utility savings over time, and explain when they’ll get their investment back, they’ll understand and be willing to pay more,” she says.
You can also educate customers by sharing copies of studies or articles, pointing them to websites, or preparing your own ‘tip sheet’ that spotlights key points. But don’t rely on handing over information, says Le.
“Customers may not read lengthy reports or documents; so it also helps if you can easily share quotes or statistics.” Talk Beyond ‘Green’
While people equate the word ‘green’ with something having a positive environmental impact, the generic label does little to convince potential buyers of the enormous financial, environmental, and health benefits of a high-performance property. You’ll pack more punch by replacing ‘green’ with more specific, descriptive language.
“I avoid using the term ‘green’ because it has no guidelines – anyone can call anything green,” says Wendy Whitty, Broker/Owner of Whitty Real Estate in Easton, MA. “Instead, I discuss the specs, or the HERs rating. Focus more on things you can document.”
“It’s all the small things that a customer doesn’t think about, that mean the home is engineered for energy efficiency,” she adds. “The best part is often what (the customer) doesn’t see – you need to make sure they know.”
Unlike traditional extras that tend to sell themselves – a gleaming granite countertop needs little convincing – energy saving components often need an extra spotlight to bring them to their full glory. You’ll need to point out and explain less-obvious features, from the LED light bulbs to the water conserving irrigation system to the heat-deflecting roofing materials.
Remember to include the positive impact for the homeowner; improved air quality means more when you ask if anyone suffers from allergies, and programmable thermostats are more appealing when you associate them with an end to chilly mornings. Become a Trusted Resource
With any new direction comes terminology, products, and processes to learn, but by keeping your knowledge current, you can become a go-to person for energy-minded buyers and sellers.
“If customers understand the terminology better than the REALTOR®, you introduce doubt, and you don’t want any doubt in the transaction,” Foley says.
Foley has seen tremendous reception for a class he teaches for agents and brokers on the developing high performance housing market in Massachusetts. Developed by RE/MAX Leading Edge in an initiative with the Massachusetts Department of Energy Resources (DOER), it’s one of the few courses of its kind in Massachusetts, and an informal poll of attendees has yielded favorable interest.
Pursuing LEED credentials is another way to keep up with industry changes. Two credentials applicable to real estate professionals include the LEED Accredited Professional (AP) and Green Associate. LEED also offers a LEED for homes Marketing Toolkit.
Other educational programs include the Commercial Brokers Association’s Certified Green Broker program, and the National Association of REALTORS® Green Designation.
Every profession evolves with the times. As a REALTOR®, developing sales techniques that educate and influence customers, and maintaining a strong knowledge base, will enable you to become a frontrunner in managing high performance homes.