ShareWhy dig into green properties? Perhaps you’re driven by environmental concerns. Or maybe you want to stay on the leading edge of global market trends. There are many compelling reasons to dive deeper into resource-efficient homes!
A listing agent must know how to identify and value green upgrades. Otherwise, the owner risks losing money on the sale.
Representing Buyers
Buyers from around the world reflect different perspectives and priorities. As a global real estate professional, it’s essential to help buyers make the best purchase decisions, especially if they’re relying on you to help them navigate an unfamiliar market.
Many international buyers prioritize high-performance, resource-efficient homes, but may use different words to describe their preferences.
“Here in the Seattle area, I’ve found that my international buyers don’t say ‘I want a green home.’ They say ‘I want a quality home,’” explains Brenda Nunes, CIPS, GREEN, and Managing Broker with Keller Williams Eastside in Kirkland, Washington.
“They’re looking for a home that performs well and provides a more enjoyable, healthy living environment.”
In the U.S., for example, a large percentage of the housing stock was built before 1980, long before people started paying more attention to things like the type of heating and cooling systems that were installed, which materials were off-gassing, and whether the home was sufficiently insulated.
As a real estate professional, it takes specialized training to evaluate a home from these perspectives and guide buyers—especially foreign buyers—in making an informed purchase.
Representing Sellers
Many owners have already made upgrades to their property to improve its performance. In most cases, however, they haven’t secured any official certification for their home, such as LEED or ENERGY STAR®.
A listing agent must know how to identify and value green upgrades. Otherwise, the owner risks losing money on the sale.
“In the U.S., most agents walk into a home and see 3BR, 2BA,” says Joanne Douds, CIPS, GREEN, with Weichert REALTORS® in Maplewood, New Jersey. “However, after spending two days taking NAR’s Green Designation course, agents see homes quite differently.”
“The Green Designation training helps us protect our clients’ investments in their home,” adds Brenda Nunes.
Pricing Considerations
Features that improve a home’s energy efficiency typically cost more to purchase and install, compared to less-efficient alternatives. With technology advances in many product categories, however, it has become easier to recover higher upfront costs with lower operating expenses.
With faster recovery costs, many buyers, including international buyers, are willing to pay a premium for resource-efficient homes.
In the U.S., for example, foreign buyers tend to spend more on their homes, with a median purchase price of $280,600 compared to $259,600 for all U.S. existing home sales, according to NAR data.1 The research didn’t specifically probe for green home features, but agents have observed global buyer demand for these features.
“International buyers represent a significant segment of my market,” says Brenda Nunes. “They often prefer a smaller square foot home with the same number of bedrooms and baths, because it’s easier to maintain and more resource-efficient. This is particularly true if they’re buying an investment or rental property.”
“It’s a frustrating dynamic to listing clients owning larger homes. They don’t understand why they’re penalized on a cost/square foot basis.”
Common Challenges
Various market studies have confirmed that resource-efficient homes do sell for a premium. However, from a valuation perspective, one of the biggest challenges is identifying comparable properties.
Finding suitable properties can also be difficult if you’re representing a buyer searching for particular green features.
With growing interest in resource-efficient homes, it’s become more imperative to “green the MLS.”
Appraisers and lenders rely on adequate MLS data to price U.S. properties and value various home features. And agents rely heavily on the MLS to meet their fiduciary responsibilities to both buyers and sellers.
Featured CIPS Member Benefit
Exclusive Facebook Group
Over 2,100 CIPS designees from 70 countries are members of the Facebook community, “Official Group: NAR CIPS Designees.” It’s a private, designees-only group to facilitate networking among the best of the best in global real estate.
Each year, members of this closed group share hundreds of referrals, in addition to countless business-building tips. Ask questions, share events and ideas, and discuss what is happening in your market.
Join the conversation! If you aren’t already a member of the Official Group: NAR CIPS Designees, search for us on Facebook and request an invitation.
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