Excerpt: Learn About Energy Audits

The following is excerpted from Sustainable Housing and Building Green (Dearborn, 2008) by Marie S. Spodek and Ken Deshaies.

Audits in the Real Estate Transaction

Energy audits are an excellent source of additional information to help sellers, builders, and buyers make quantifiable decisions when buying new appliances or a new home. Tenants also benefit because energy audits allow them to choose energy-efficient rentals. (VIDEO: Watch an energy audit in action.)

Role of the Real Estate Licensee

Essentially, licensees should be the “source of the resource, not the source of the information.” Real estate licensees should not hold themselves out as experts, and they should not promise savings or results from an energy audit. To avoid any hint of impropriety, agents should never accept a “referral fee” from any of these companies or sell any of the products without fully disclosing any relationship to the company. Even with full disclosure, licensees should avoid “requiring” the purchase of any product or service with which they are associated.

Useful for Sellers

Real estate agents should encourage sellers to consult the HES Web site. Based on life cycle and energy costs, sellers can determine which appliances to pack up and move and which to leave behind, avoiding moving costs as well. The site might help a seller to recognize whether an appliance or feature adds to or detracts from the asking price, especially in relationship to competing properties. Also, some of the information can be entered into multiple listing service (MLS) information that can be used by buyers and appraisers.

Buyers and sellers do ask real estate agents for hiring recommendations, however. Agents can provide several options but should avoid making any specific recommendations. Agents can say, if true, “Here is a list of energy auditors used by other real estate clients. Please ask for references and follow up by calling each of the references.”

Useful for Buyers

Real estate agents can help their buyer clients make better informed decisions in a quantifiable manner about whether to buy an energy-efficient home or a traditionally built home. Builders and their buyers can consider the impact that the latest in energy technology might have in order to decide what they want to include in their homes, especially when considering asking for some of the personal property such as refrigerators, freezers, washers and dryers, and so on. This analysis provides the data buyers need to make decisions and to decide on trade-offs, such as paying a bit more for a home with energy-efficient appliances with the expectation that they will have lower utility bills as a result.

This textbook is currently used across the country in continuing education classes for real estate agents and mortgage bankers. Please note that this book can be purchased through RECampus for professional development purposes; however, it cannot be purchased through RECampus for continuing education credit.

Melissa Tracey

Melissa Dittmann Tracey is a contributing editor for REALTOR® Magazine, writing about home & design trends, technology, and sales and marketing. She manages the magazine's award-winning Styled, Staged & Sold blog.

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  1. kria lacher

    Energy audits are a great idea when the motivation of the client is there and the cash is available to do the improvements. Most of my first time home buyers are very motivated to have an energy efficent home and the also do not have much disposable cash. I usually point them to the free programs. I have found that doing an audit for a buyer (usually not a first time home buyer) that has cash to impliment the suggestions is the best time to do it during a real estate transaction. These buyers usually do the recomendations right away.

    In my state they are talking about mandating the audits for real estate transactions. I have found that very few of my sellers want to do an audit before they put their home on the market. I have also been asking this of my clients for seven years. I firmly believe the right time to require the energy audits is when someone is motivated to impliment the changes. I do not think that requiring a person in foreclosure to have an audit is the right time to do it, for example. I also believe that most people have an intuitive understanding that an older building is not as energy efficent as a newer home. Mandating auditing at the time of a sale is not the best time to require it.

    The testing could be broken down into parts. The duct testing could be required by code when someone replaces a furnace. Maybe the code could also require that the ducts get corrected at the same time the furnace is installed. The blower door test could be required for putting on an addition to the house.

    I hope we can also look into the effectiveness of the testing that was done in the late 70’s and 80’s.