Value for High Performance Homes
About High Performance Homes
The Value for High Performance Homes Campaign is a group of real estate and energy efficiency professionals working together voluntarily to remove barriers to and demonstrate the value of energy efficient and high performance homes in the single family market.
The purpose of this work is to create the infrastructure for the high performance home transaction so that upgrades are transparent to the market – encouraging their fair value. The high performance home deserves and needs an improved process because what makes these homes special is often invisible to the naked eye – such as high-quality insulation in the attic. It is important to make these features visible for an entire chain of stakeholders, including the high performance builder or contractor, listing agent, and the buyer’s agent, appraiser, underwriter, lender – and ultimately, the consumer. We define a high performance home as a new or existing home that uses less resources via design, technology, efficiency improvements, and building products across the entire home building and site, taking into account elements such as stormwater management, safety, disaster resistance and durability, air sealing and insulation, and indoor air quality.
This page serves as a hub to highlight progress and resources that are improving the transaction process for high-performance homes. Here you will find related news on the high performance home real estate transaction as well as important tools for each audience intertwined in the transaction. Please sign up to receive regular alerts on the Value for High Performance Homes Campaign:
Value for High Performance Homes Newsletter
There is no one forum where real estate, lenders, appraisers, builders, and home performance experts come together to identify barriers and test solutions in the market. The Value for High Performance Homes Campaign is needed to advance what’s already working, share resources, accelerate learning, improve evolving ideas, and highlight progress. Since 2011, Elevate Energy has been playing a facilitator role to align the process, players, and assets needed to make energy efficiency value visible during the real estate transaction.
As a provider of regional energy efficiency programs, Elevate Energy understands that future success is dependent upon energy efficiency becoming transparent in the real estate transaction of high performance homes.
A Blueprint to Make Energy Efficiency Improvements Visible
Often, when homeowners make improvements to an existing house, the most important aspects of home performance – including safety, comfort, energy efficiency, durability, and environmental impact – are literally invisible during key steps of any home sale or refinance transaction. One result is that energy efficiency investments are overlooked or inaccurately valued at the time of a home sale.
In order to advance the transaction for high performance homes, Elevate Energy along with the National Home Performance Council has published a blueprint to make energy efficiency visible throughout the real estate transaction process. The paper, Unlocking the Value of an Energy Efficient Home: A Blueprint to Make Energy Efficiency Improvements Visible in the Real Estate Market, outlines seven steps the energy efficiency industry must take to unlock the value of efficiency in the real estate market:
- Consistently document energy efficiency improvements
- Report on the growing inventories of energy efficient homes
- Capitalize on existing education and training opportunities
- Work with the real estate community to reflect these improvements in local for-sale listings
- Ensure data is incorporated into the appraisal process
- Develop standardized IT solutions
- Work with partner financial institutions
Resources for energy efficiency programs, contractors and regional efficiency alliances:
- Unlocking the Value of an Energy Efficient Home: A Blueprint to Make Energy Efficiency Improvements Visible in the Real Estate Market
- BPI-2101-S-2013 Standard Requirements for a Certificate of Completion for Residential Energy Upgrades
- Building Performance Institute (BPI) Home Performance Certificate Standard (proposed)
- Green MLS Toolkit
- Appraisal Institute Green & Energy Efficiency Addendum
Resources for MLS operators and software system vendors:
- RETS Green Data Dictionary (public comment version 1.2)
- Green MLS Implementation Guide (public comment version 1.0)
Programs can serve an important role to define the handoff points for these tools, ensuring that their impact is passed along through the entire value chain of green builder or contractor or homeowner to listing agent; Green MLS; buyer’s agent, appraiser, and lender, resulting in fair value at closing. The key points at which information needs to enter the real estate transaction are depicted here:
The tools on this website are organized to help energy efficiency programs, contractors, and regional efficiency alliances implement the seven steps defined in the blueprint. Below, we’ve identified tools for the first three steps. Please check back often, we’ll post additional tools as they are available.
Step 1. Consistently document energy efficiency improvements
Resource: BPI-2101-S-2013 Standard Requirements for a Certificate of Completion for Residential Energy Upgrades
To date, there has not been a consistent way to record home energy upgrades completed on an existing home. The Home Performance XML (HPXML) standard defines data collection (BPI-2100) and data transfer (BPI-2200) standards for home energy upgrades.
The certificate standard is based on the HPXML data elements and applies these standards specifically in an MLS- and appraisal-friendly way to facilitate the resale or refinancing of these homes. The certificate standard was defined based on design of both the RETS green Implementation Appraisal Institute Green & Energy Efficiency Addendum.
The certificate standard was recently approval as a BPI standard and is schedule to complete the ANSI standard approval process. The standard is to be implemented locally to create a specific certificate that best suits the needs of the local market.
Step 2. Report on the growing inventories of energy efficient homes
Step 3. Capitalize on existing education and training opportunities
Step 4. Work with the real estate community to reflect these improvements in local for-sale listings
Resource: RESO Green Data Dictionary (Version 1.0)
Data integrity and transfer is so integral to the real estate transaction that effective in 2009 the National Association of Realtors (NAR) mandated that the multiple listing service comply with an industry standard called the Real Estate Data Standard. The Real Estate Standards Organization (RESO) manages the standard as well as a Data Dictionary which has two purposes: To serve as a non-RETS guideline for a national standard for the fields and look-ups (enumerations) in the MLS; and as a common center for all expressions of fields and enumerations in the RETS standard.
The RETS Data Dictionary public comment version 1.2 includes ten fields specifically related to high performance homes.
Elevate Energy is working with NAR to create an Implementation Guide for these fields to encourage more widespread and consistent adoption among the more than 850 MLS fields. The Green MLS Toolkit helps programs understand how to work within the real estate community to implement RETS-compliant green fields.
Step 5. Ensure data is incorporated into the appraisal process
Resource: Appraisal Institute Green & Energy Efficiency Addendum
The Appraisal Institute Green & Energy Efficiency Addendum is a form appraisers can use as a worksheet to assess the value of high performance homes. It is the first residential green and energy efficient appraisal report addendum made by appraisers, for appraisers. This addendum is meant to accompany the Uniform Residential Appraisal Report (Form 1004) which does not have sufficient space to note details about high performance homes. The form allows high performance details about a property to be captured in a thorough and consistent way. The appraiser then determines how to apply these details to the property file.
The Addendum specifies that programs may complete the form based on data collected as part of home energy upgrade.
Step 6. Develop standardized IT solutions
Step 7. Work with partner financial institutions
- Green Resale Studies, NAR Green Resource Council
- NCEEA’s ENERGY STAR Market Impact Study
- Value of Green Labels in the California Housing Market
- Green Building Cost-Benefit Analysis, New Jersey Association of Realtors
- Buyers favor ‘green’ houses, but they’re often not easy to identify or appraise, The Washington Post
- Home Energy Efficiency and Mortgage Risks, a study by the Institute for Market Transformation
- Energy Efficient Homes Are Much Less Likely to Go Into Default, The Atlantic Cities
- Home Energy Efficiency and Mortgage Risks, a study by the University of North Carolina at Chapel Hill Center for Community Capital and the Institute for Market Transformation (IMT)
- RESO Data Standards Now Support NAR Green MLS Toolkit, PRWeb
- Appraisal Institute Releases Enhanced Form to Help Real Estate Appraisers Analyze ‘Green’ Features
- Help sellers get fair value for home’s ‘green’ features, Inman News
- Building Retrofit and Industry Market (BRIM) Initiative: Reactions to the Residential Retrofit Roundtable Recommendations, prepared for the Energy Foundation