Better Buildings White Paper: How Energy Efficiency Programs Can Help Capture Efficiency in Real Estate Transactions

November 1, 2015

The U.S. Department of Energy (DOE) has released a new white paper highlighting how residential energy efficiency programs can help make homes' energy efficiency visible to appraisers, real estate agents, mortgage lenders, homebuyers and sellers. Download the paper here.

Multiple studies in recent years have indicated that energy efficiency is an important consideration for homebuyers. In fact, energy efficiency-certified homes sell for a premium in some regions of the United States. The home sale process, however, frequently fails to account for the value of high performance home features. When homes' energy efficiency features are more accurately reflected in home resale prices homeowners can have more confidence that efficiency investments will be recouped at resale.

The white paper, which was prepared by Lawrence Berkeley National Laboratory, provides examples of programs around the U.S. that are successfully engaging the real estate community and overcoming barriers to valuing energy efficiency in the home resale process. The research draws on literature and interviews with efficiency program staff and real estate professionals.

Energy efficiency programs already capture data needed to make efficiency features more visible in real estate transactions. Program administrators play a vital role in making sure this information is transmitted to the people who need it in formats they can use and understand. A number of programs, highlighted in the paper, have already begun to close information exchange gaps through one or more of the following efforts:

  • Issuing a home energy rating or score to program participants: provides a standardized approach to documenting a home's performance that can easily be indicated in a multiple listing service (MLS);
  • Issuing certificates that leverage existing national standards: provides trusted third-party verified information that real estate agents prefer;
  • Requiring participating contractors and homebuilders to attach stickers documenting a home's efficiency information to the home's circuit box: ensures efficiency information stays with the home and can be found by the listing agent when the home is put on the market;
  • Engaging program participants after the upgrade:reminding homeowners to share their home's efficiency information with agents and appraisers helps ensure efficiency information is transmitted to the MLS;
  • Working with the local board of realtors to establish green fields in the local or regional MLS: provides repository necessary for transmitting homes' efficiency information to the market;
  • Adopting interoperable standards for documenting efficiency data, including the Building Performance Institute's (BPI) BPI-2101 standard that defines data requirements for energy upgrade or performance certificates and integrates with established real estate valuation tools.

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