Monday, August 12, 2013

Is my home more valuable after insulation and air sealing?

The obvious answer to this clearly rhetorical question is ‘yes’.  All of the home’s occupants see an immediate improvement in comfort, utility bills are reduced by 15-35%, shorter run times mean the air conditioner and furnace will need to be replaced less frequently, and indoor air quality is improved after sealing off the areas of the home you don’t want to get your breathing air from.  If that's not value, we obviously don’t get it.

But if the question is re-phrased as “Is my home worth more after insulating and air sealing?” then the obvious answer to this clearly rhetorical question is ‘no’.   Your appraiser, your lender and your real estate agent aren’t currently offered the tools to place a value on a home’s energy efficiency and properly credit the homebuyer and/or seller . 

That may be about to change.

It's called The SAVE Act (Sensible Accounting to Value Energy).  The above video and this article from the NY Times explain all the important stuff, but here’s the gist of it:

--An efficient home is worth more money because it costs less to operate.
--All it takes to calculate the value of the utility savings is a home energy report.
--Simple and proper accounting, with no cost to taxpayers, creates this opportunity.

It would mean that energy efficient homes will sell for more money.  This also means that, when qualifying for a mortgage, buyers get a credit for the reduced cost of operation and can therefore qualify for more home.  The real estate agent will get paid the same percentage...but has bigger tickets to sell.  It would mean that manufacturers and installers of energy-efficient products (well, hello there) stand to benefit. 

Who wins?  Every.  Body.

The SAVE Act was a standalone bill until it was recently attached as an amendment to the Shaheen-Portman Energy Savings and Industrial Competitiveness Act (S.1392), which is entering the home stretch of its life span as a bill.  If voted into law, the final hurdle would be to educate lenders and ensure that they have the necessary tools to assist homeowners and potential homeowners.  And since most lenders understand full well how money works, we think it wouldn't take long for them to get on board and start offering this to customers and homeowners.    

The rubber hits the road when lawmakers reconvene from congressional recess on September 9th.