Affordability - A Hot Trend in Home Sales Right Now

One trend is coming across loud and clear for home sales this year - demonstrate lower monthly bills and you will attract buyers!  Fifty to 75% of home buyers shop utility bills when looking for their next home.

Chicago Magazine made this their leading advice for selling your home this season:  staging for energy efficiency is a great way to make your home stand out to value-conscious buyers.  The first bit of advice in the article Boost Your Home's Value - If you want to sell this summer was energy efficiency.  

A sampling of other articles says the same: 

• Realtor Magazine:  5 Ways to Sell a Home Faster, For More Money - “Talk about energy efficiency: Many buyers don’t fully understand “green” homes but they understand savings. Sellers should point out any features in their homes — such as energy-efficient windows or appliances — that could save buyers money with utility costs.”
• Trulia:  5 Shockingly Selfish Reasons for Going Green at Home - Top 3: ”Save Money Now. Sell Faster. Boost Your Net Worth.”
• USA Today:  Builders – Energy Efficiency Greens Most New Homes - “Two-thirds of builders and remodelers say customers request green homes to lower their utility bills — more than twice as often as any other factor”

So what are some steps you can take if you want to attract value-conscious buyers?  Here are some great staging tips for your home - and they will help you save a little money while your sale comes together!

• Install a programmable thermostat. This is now a prerequisite for "well-maintained" homes. The good news is that a basic $50 programmable thermostat can save over $100 per year on heating and cooling!  So why not install (or use) one for yourself right away?
• Replace light bulbs in  five key areas.  Ditto above - another prerequisite. Focus on the five most used lights first to see the savings start to add up on your next ComEd bill:  1. Outdoors 2. Kitchen 3.  Family/living room 4.  Dining room/eating space 5. Bedrooms. 
• Get the perfect color light bulb! You can get all sorts of "normal" shaped bulbs now too.  A warm, yellowish light is just like the incandescents buyers are used to.  Look for bulbs that have a color temperature around 2700 degrees kelvin for the best ambiance.  The new light bulb label (right) make it easy to find color temperature and pick a bulb that really enhances your home. 
• Earn rebates on CFL bulbs.  Use a ComEd retailer and earn a rebate on replacement bulbs!

Once your home is under contract the home inspection is a big next step.  Many items that become home inspection hot spots are good places for energy efficiency improvements.  The Energy Impact Illinois program is supported by a Department of Energy Grant and makes it easier than ever to understand the best way to replace key systems in your home, and also identifies qualified rebates and loans to cover the work. Check out their "Make Improvements" list to see if any of their tips and rebates relate to home inspection issues.  Who knows, by empowering your buyer with great resources "big problems" might becom much less of a concern and actually improve the way your deal is coming together!  

Finally, if you want to really highlight your home's affordability and maximize the benefits of home improvement, you can participate in the Illinois Home Performance with Energy Star program.  You follow a home improvement process focused on cutting your energy use.  The program follows a quality system that starts by qualifying contractors and ends by testing the results of your improvements to make sure they actually worked.  Once complete, you will receive a Silver or Gold certificate, depending on savings achieved.   It's a great document to share with prospective buyers to show that your improvements meet the high standards of Energy Star. Plus, the certificate is even a searchable field in Chicagoland's multiple listing service.

Whether you've made big efficiency improvements to your home or you are just getting started on the basics - now is the time to showcase how your home is not just a great value to buy, but to operate too!

Green - as in saving money - is all the rage!

If you've been paying attention to the real estate and finance news lately you might have noticed a shift in the latest green home trends.  With the state of the current economy, the new "green" has to do first with your own wallet, and the planet next.  But that's OK because what's good for your budget is good for the earth too. 

Yahoo! Finance reported money-saving green features as one of the top 9 real estate trends for 2011.  

"The buyer of today wants to make sure that the ongoing operating costs of the house are as controlled and economical as possible," says Ron Phipps, president of the National Association of Realtors.

The National Association of Realtors' Council of Residential Specialists reported on Lean & Green: Green Features Still in Demand in their June magazine.  

“They want to know how much energy consumption is going to remove from their pocketbook. To me, that is the true green question,” says Polly Briley, CRS, of RE/MAX on the Water in Oshkosh, Wis.

And although buyers are currently motivated more by saving money than saving the planet, it seems clear that they’ll be interested in greening their homes for many years to come.

NAR research over the past three years backs up this trend.  85 percent+ of buyers surveyed those years said heating and cooling costs were important to them. 

The good news for home owners is that it's beginning to get easier to plan projects and save money when adding energy efficient green improvements that will have long-term appeal to buyers.  For example, the Department of Energy's BetterBuildings program will be coming to Chicagoland/Rockford soon, bringing together resources for understanding your home's energy improvement opportunities and creating easy links to utility and other incentive and financing programs and qualified contractors who can do the work right to get the most energy savings.  The program called Energy Impact Illinois recently launched its information hub and will be rapidly rolling out more services from now into the fall.  

What if home improvement paid you back?

Each year, Remodeling Magazine and Realtor Magazine team up to produce the Cost vs. Value report.  The study looks at regional building permit data to estimate remodeling costs for more than 30 common home improvement projects.  Then, Realtors weigh in to estimate the value these projects add to a home’s market value.  It’s a handy report that gives homeowners some perspective on the best way to spend home improvement dollars each year.

But the report is missing one thing.  What about payback?  Many of the project scopes could be tweaked just a little to include some energy efficiency improvements at the same time. It's a super-smart time to add these steps while drywall is already off and walls are already open - you cut the dust and prices later over doing these same improvements as stand alone projects.  These upgraded projects would potentially add not just value, but offer savings through reduced energy costs.

The following lists show the Top 5 Chicagoland projects based on estimates of remodeling costs recouped at resale as reported in the Cost vs. Value report.

The second list uses energy data compiled by the Center for Neighborhood Technology/Energy, Efficient Windows Collaborative, ENERGY STAR and Keep Warm Illinois to show the top projects based on natural gas savings for a typical/average home in the Chicagoland area.

2010 Top  Chicagoland Home Improvement Projects:

• #1 Steel Entry Door Replacement - Cost recouped:  102.1% - Cost:  $1,218, Resale value:  $1,243
• #2 Garage Door Replacement - Cost recouped:  83.9% - Cost:  $1,291, Resale value:  $1,083
• #3 Siding Replacement (Fiber Cement) - Cost recouped:  80% - Cost:  $13,382, Resale value:  $10,707
• #4 Minor Kitchen Remodel - Cost recouped:  72.8%  - Cost:  $21,695, Resale value:  $15,790
• #5 Deck Addition (wood) - Cost recouped:  72.8% - Cost:  $10,973, Resale value:  $7,986

2010 Top Chicagoland Payback + Value Projects:

#1 Basement Remodel + air sealing + insulation.  Extra energy efficiency costs:  1% (Upgrade to air seal & insulate basement - $1,000-2,000; Tip: be sure to also upgrade home ventilation)

Potential average energy savings: 24%

#2 Attic Bedroom + air sealing + insulation.  Extra energy efficiency costs:  3% (Upgrade to air seal and insulate attic - $1,800-2,400; Tip: be sure to also upgrade home ventilation)

Potential average energy savings: 24%

#3 Window Replacement (wood) + air sealing.  Extra energy efficiency costs:  10% (Upgrade to air seal walls, attic, basement - $1,300-1,700; Tip: The savings comes from the caulk around the windows more than the new windows themselves!  And, be sure to also upgrade home ventilation.)

Potential average energy savings: 24%

#4 Siding Replacement (Fiber Cement) + air sealing + insulation.  Extra energy efficiency costs:  21% (Upgrade to air seal walls and insulate side walls -$3,500-4,500; Tip: The savings comes from sealing leaks in the walls more than the new siding itself!  And, be sure to also upgrade home ventilation.)

Potential average energy savings: 32%

#5 Steel Entry Door Replacement + air sealing.  Extra energy efficiency costs:  17% (Upgrade to advanced weather-stripping - $250; Tip: Savings comes from buying a well-insulated door and then sealing it with effective weather-stripping!)

Potential average energy savings:  11%

Estimates are one thing, knowing the exact savings opportunities for your specific home is another.  A home energy audit is a great place to start.  Utility program incentives are scare in Illinois (People's customers get a good one), but not a bad place to start just to see if resources are available.  Or, contact a local energy auditor.

Entry door and siding replacement make both the top cost recouped and payback lists.  So if you are considering either of those it is simply a no-brainer to include energy efficiency upgrades in your scope!

Riverside - Act Now for a Great Home Energy Boost!

Our very own Riverside, Illinois, is the first community in the nation to have access to an innovative new tool that can quickly help you understand energy efficiency opportunties in your home, what options you have for rebates and credits to cover the work, and access to quality contractors to get the work done!  

MyHomeEQ tells you in a few clicks about the efficiency of your home and opportunities to save money and improve comfort.  MyHomeEQ pulls actual energy usage information from Nicor and ComEd as well as information about your home as filed with the Cook County tax assessor.  Instant insights into how much energy your home uses compared to the savings for homes like yours that have improved energy efficiency features.  

Until April 30, Riverside homeowners can use MyHomeEQ to connect with programs from Nicor Gas and ComEd. The program offers a fast-track to big savings on upfront costs and monthly bills:

• Customized recommendations for energy-saving home improvements in a few clicks based on your home’s actual energy use, size and shape
• A follow-up professional home energy evaluation for only $50 (returned to you if you go through with recommended energy efficiency work). A professional energy auditor will evaluate your home and recommend the most effective energy saving home improvements. (This service typically costs $400 – $600!)
• Quick access to skilled contractors right from MyHomeEQ.com
• $40 worth of free upgrades:  installation of faucet aerators, an efficient shower head, and up to 10 free compact fluorescent light bulbs provided by ComEd
• Details on how to earn energy efficiency rebates and other incentives
• Opportunity to qualify for funding that covers 50% (up to $1,250) of the cost of additional energy-saving home improvements as recommended in the home energy evaluation

Last year the Cool Cities Coalition in nearby Elmhurst estimated that projects like this in our region might save 10-30% on energy bills, and could potentially add to the value of your home. On top of that, a Federal tax credit up to $500 may be available.  

The number look good!  What are you waiting for?

For more information, check out the article in the Riverside Landmark. Or, join the MyHomeEQ team for a demo at the Riverside Public Library on Thursday, March 31, 7 p.m. - 8 p.m.   

 

Tips from CUB - Are those "alternative energy providers" legit?

The utility business in Illinois just became officially confusing!  The industry changed recently, allowing you to buy electrical service from new providers while ComEd still deliveres it to your home.  You might have noticed ads and flyers popping up with info.

But how does this work?  Are the green claims really green?  And which program is right for you.

The Citizens Utility Board or CUB just came out with a great webpage that explains all the info.  See their comparison chart to evaluate your options.

2011 Energy Efficiency Tax Credits

Last year, the federal government offered some pretty juicy tax credits for energy efficiency home improvements.  The amount has been basically cut to a third (from $1500 to $500). But if you use the credits wisely, they are still a great opportunity to make your home more comfortable and save money every month on your energy bills! 

Green Homes America offers an easy-to-read overview with details on this year's credit, how much for different improvements and more. 

Are you patient? - Energy Efficiency incentives in Illinois

As a state, Illinois has not offered a lot of incentives for energy efficient home improvements.  The utilities have not been very proactive either.  The current federal energy efficiency tax credits are set to expire on December 31st.  The federal ENERGY STAR appliance rebates are long-gone.  Are there any options for suburban Chicago home owners?  Yes - but you either have to be lucky or patient! 

If you like to be lucky, keep an eye out for a new program from Nicor. Their Existing Home Retrofit Program offers a free mini-energy audit and on-the-spot CFL light-blub upgrades.  If the home owner chooses to do additional recommendations, they split the cost for those improvements 50/50 with Nicor.  Nicor is going neighborhood by neighborhood and targeting homes built before 1960 with above-average heating usage.  You cannot enroll in this program - if you qualify, Nicor will reach you.  So if you get a letter and a postcard about the program from Nicor you can consider yourself lucky (that you qualify for the incentives) or unlucky (that you live in a home that uses so much energy!).  Either way, if you get the letter, be sure to confirm your participation as soon as you can! 

If you like to be patient, keep an eye out for one of two great programs:

• Illinois Home Performance with ENERGY STAR is a state program that provides guidelines and performance targets for making existing homes more efficient.  Homes that complete the program can leverage the ENERGY STAR brand as a third-party verfication that their home is more efficient.  This program will be rolling out in Illinois soon.  
• Chicago Region Retrofit Ramp-Up is a federally-funded program that will make it easier for home owners to plan good energy efficient improvements. The grant will support a call-center to help home owners get started, plan work, find contractors and even qualify for low-interest loans to pay for the work.  The program is being implemented by CNT Energy with rollout plans coming soon! 

Watch for details to participate in either of these big programs as they are available!

 

Items of Interest for 2011

So the Illinois Association of REALTORS published a long list of laws that take effect January 1, 2011 that are important for REALTORS (excerpts below are taken from illinoisrealtor.org/newlaws2011). A few of the items caught my eye that I thought would be beneficial to our consumer blog subscribers. I know it's not the most exciting information to read but it's informative, especially when it applies to you!

 

Solar Energy System Ban Restricted

Certain homeowners, property owners or condominium unit owners associations will be prohibited from adopting bylaws, deed restrictions or covenants that would ban the installation and use of a solar energy system. These associations must adopt an energy policy statement regarding the location, design and architectural requirements of solar energy systems within 120 days after it receives a request for a policy statement or an application from an association member. It approval is required for installation or use of a solar energy system, the application must be processed within 90 days after the submission of the application. If an application is submitted before the association has adopted an energy policy statement, the 90-day period does not begin to run until the date that the policy is adopted. The association is given the right to determine the specific location where a solar energy system can be installed on the roof provided it does not impair the effective operation of the system and the solar energy system would be required to meet applicable standards and requirements imposed by state and local permitting authorities. Important Note: The new law does not apply to any building greater than 30 feet in height.

 

Lead Safety in Renovating/Remodeling

The United States Environmental Protection Agency (EPA) began its mandatory lead-safe certification process on April 22, 2010. While contractors and remodelers have the primary responsibility to comply with the new federal mandates, property managers may also face new compliance requirements. A new U.S. EPA pamphlet, "The Lead-Safe Certified Guide to Renovate Right" must be given to homeowners or tenants before work begins. Property managers doing any renovation, repair and painting work must be trained and certified in the new lead-paint safe work practices. Outside contractors also must be trained and certified. Mandatory training and certification on lead-based paint practices will be required for renovation, repair and painting activities in single and multi-family housing built before 1978, child care facilities and schools.

There are strict rules on equipment that can be used as well as new record keeping requirements and stiff fines are in place. If a property owner is conducting their own renovation, repair or painting activities they are exempt.

 

I have more to report but it's too much...too much for one blog post.

Tick, Tick, Tick...ENERGY STAR tax credits expire soon!

The best opportunity for Illinois residents to save money on energy efficiency improvements will soon be a thing of the past.  The current federal ENERGY STAR tax credits are expiring on December 31st.  And there is nothing in the works to follow them.  Since Illinois as a state does not offer energy incentives, the time to act is now! 

The tax credit is available for specific green home improvements installed by New Year's Eve.  Not all ENERGY STAR products qualify, so check the requirements before you shop!   Credits for other bigger initiatives like adding geothermal heating and cooling with continue for another few years.  But don't worry about that - those projects cost a lot more if you don't add the insulation first! 

If you'd like to earn the tax credit, you have two options for a last-minute project, but you have to act now! 

• Upgrade your old water heater - Earn an additional $100 rebate from Nicor
• Add insulation

Water heaters typically have an 8-10 year lifespan and aren't intricately connected with other systems in your home the way a new heater would be.  They are a smarter improvement if you want to meet the deadline and don't have the time to more scientifically determine your energy improvement needs. 

If you live in an older home, especially one built before 1970, insulation is almost always a good idea.  Best practices today would encourage you to get an energy audit first, and then do air sealing before insulating your home.  (Air sealing seals up gaps that cause drafts in your home under the insulation.)  But to meet the deadline for a mini-insulation project, you could hire an insulation contractor with an industry certification like BPI.  Cool Cities Coalition in Elmhurst provides a handy resource for planning green home improvements.  Their Project Green website provides more information on green improvement best practices.  Their directory includes BPI air sealing and insulation contractors that serve the DuPage area. 

If you plan a last-minute project, be sure to get the Manufacturer's Certified Statement before you buy!  It's the documentation you'll need to submit to the IRS for your tax credit.  (See ENERGY STAR FAQs, "Tax Credits/Rebates", then look for Manufacturer's Certified Statement)

 

MPG...for your home???

A Miles Per Gallon sort of sticker could be a part of home sales in the future.  The Department of Energy (DOE) recently released its proposal for the National Home Energy Rating Program last month to begin the process.  

Under the current proposal, homeowners could opt to have a home inspector or other evaluator review the energy characteristics of the home and give it an overall energy score.  This score would help potential buyers evaluate how much comparable homes are to operate, in addition to simply considering features, location, price, etc. 

Current speculation says that HomeEnergySaver PRO is DOE's leading assessment tool.  A consumer version is also available.  The professional tool is in beta development by Lawrence Berkeley National Laboratory with support from Microsoft's HOMH home energy assessment software.  The project was recently recognized by R&D Magazine as one of the 2010 R&D 100 Award Winners. 

It's too early yet to tell how or when the final program might roll out.  Some say the existing RESNET Home Energy Rating Score or HERS already fills this need. Critics prefer a two-track system, or some way to show how the DOE score relates to HERS and visa versa.  Others appreciate that the program is at a lower price point than HERS and not mandatory, but are not sure how many homeowners will sign up.  Another concern is that the DOE plan currently looks only at energy characteristics to estimate a score.  Critics complain that you also need to evaluate current energy bills to keep the estimating more accurate.   

If you are interesting in understanding how your home uses energy and how to improve it, a HERS rating might be a good investment.  Even the next step down, an energy audit is beneficial.  The energy audit includes the diagnostic testing to help you plan energy improvement remodeling, but without the expense of the final rating. Members of the Illinois Association of Energy Raters can help you get started.