By Steve Graham, Networx
Recent studies suggest that solar panels and other sustainability upgrades can help a home sell faster and fetch a higher price. Still, an experienced real estate agent said the true value really depends on smart investments and the right staging.
The Earth Advantage Institute has determined that existing homes with third-party environmental certifications sell for 30 percent more than comparable homes without such ratings. In another study, the National Bureau of Economic Research found a 97 percent return on investment for solar panels. Moreover, they can boost a home sale price by three to four percent.
Colorado real estate broker Lara Williams urges homeowners to choose their green upgrades wisely, then market them properly.
Energy Star appliances or even simple, discrete features such as low VOC paints can tip the scales for a buyer considering two otherwise similar homes. But somebody has to publicize these features.
“If a listing agent can clearly convey to the market the green upgrades that a buyer has installed, and especially the energy upgrades, the home will get special attention, and probably sell faster and at a premium,” said Williams, who started the Green Team Real Estate, which focuses on buying and selling eco-friendly homes.
Green realty is a growing niche market, and those who have made substantial green upgrades should seek out a specialized green real estate agent.
Williams said she provides potential buyers with a page listing all the eco-friendly features of the home, and the benefits of each feature. She also places cards around the house pointing out specific green upgrades, creating “a little self-guided tour.”
She also recommends providing specific dollar values for energy upgrades. For example, show the heating bills for the same month in the year before and after installing a more efficient furnace. This will help buyers realize the annual savings as compared to a similar house with an older furnace.
Williams’ other recommendations for simple green upgrades include the following:
• “If you need to clean up your yard, add native plants and plants that require less water and maintenance.”
• “If your home really needs new interior paint, spend a little more money and buy low VOC, because this really matters to a growing number of people, especially people with young children.”
• “If you are planning to update an old bathroom, install a low-flow toilet, shower head and faucet. Consider a countertop made with a recycled content product.”
She also suggests some more expensive upgrades, but they are typically only worthwhile if you can enjoy them for a few years before reselling the house, as you may not recoup the full value of the upgrade. Still, they could speed the sale and boost the price.
• “Concrete floors work well with in-floor radiant heat, which is a wonderful way to heat a home that you can enjoy while you live there and should also attract buyers.”
• “Bamboo and cork flooring are beautiful…and really help to differentiate a home.”
• “If you have old aluminum windows that leak badly, consider upgrading them with a double-paned vinyl low-e (window), and then promote that update.”
On the other hand, Williams warns against some upscale upgrades. She said she worked with one homeowner who spent $80,000 installing photovoltaic solar panels and geothermal heating in 2004, then added that amount to their expected sale price.
“However, there just weren’t any people at the time willing to pay that premium and it slowed down our sale and ultimately the sellers received almost no premium over similar homes without such a system,” she said.
Of course, the value of green upgrades also depends on the market, and the level of awareness and interest in solar panels and other upgrades. In other words, as the National Bureau of Economic Research report notes, the sale premium for solar panels is “larger in communities with a greater share of college graduates and of registered Prius hybrid vehicles.”
Green home improvements can put more green in a seller’s wallet, but only if approached and marketed properly.