2 out of 3 Home Buyers check the Home Energy Score
Portland has a unique law that requires home sellers to obtain a Home Energy Score Report before listing their home for sale on the MLS. It allows home buyers to compare energy efficiency when shopping for homes. Each home receives a score between 1-10, with 10 being the most efficient. Read more about the program here. This law has recently expanded to Milwaukie, Oregon, and is poised to start in more cities around the state.
The year 2021 will mark the three year anniversary of the Home Energy Score requirement. Let’s take a look at how things are going, whether home shoppers are actually using the Score, and whether the requirement has had any negative impacts on home sellers.
Do Home Buyers Really Care about Energy Efficiency?
New data released by the City of Portland as well as the National Association of Realtors and independent researchers all point to the answer to this question being “yes”.
With a growing awareness about the need to address climate change, as well as a desire to avoid high energy bills, home shoppers are paying attention to whether their next home is energy efficient.
When Portland’s Bureau of Planning and Sustainability (BPS) evaluated the Home Energy Score program this fall, they found that two-thirds of home buyers who purchased their home in the past three years paid attention to the Home Energy Score.
Correlating with that finding, a National Association of Realtors survey found that over 70% of real estate agents say that promoting the energy efficiency of listings is valuable when selling a home.
Finally, the American Council for an Energy Efficient Economy found that home buyers were willing to pay 6% more for a one-point increase in the Home Energy Score. This survey of over 1,500 home shoppers nationwide also found that buyers were more likely to click on a listing if energy efficiency information was displayed as a Score, instead of as a simple total of energy costs.
Is getting a Home Energy Score a barrier to selling a home?
Before the Home Energy Score policy was voted into law back in 2016, real estate agents and housing advocates expressed concerns that complying with the policy would represent a financial burden to home sellers, and create a barrier to selling their home.
To help alleviate that concern, Portland city officials created an avenue for low-income home sellers to obtain a free Home Energy Score report. However, after nearly three years of the policy being in effect, only 80 home sellers have taken advantage of that opportunity. This is after 20,000 homes have been scored before going on the market. Overall, 92% of home sellers are complying with the policy, according to BPS’ report, and the average amount paid for the Score is just $125. With real estate prices in Portland climbing steadily since the policy’s implementation in 2018, we can confidently say that getting a Home Energy Score has not been a financial barrier to home sellers, and that it’s not keeping homes off the market.
While there is some concern that low-scoring homes will be undervalued by home shoppers, most energy efficiency improvements are not expensive or time-consuming. And homeowners can receive cash-back incentives and low-interest loans to make energy efficiency improvements to their home. Check out this list of financial assistance programs available for home energy improvement projects in Portland.
Going into 2021, home sellers need to ensure that they understand the requirements of the Home Energy Score policy to avoid a potential fine and/or hit to their home value. Working with a committed sellers’ agent is the best way to make sure all the details of the home sale are taken care of. With over 1,000 Portland home sales our top 1% seller’s agents are here to make your next home sale a success! Contact us today.December 7, 2020