Green Homes Sell For More: Confirmed!
Before joining Earth Advantage Institute (EAI), I moved to Bend, Oregon and built the greenest house that I could afford. I just sold this house in a down market. The asking price was $30,000 higher than the market value and I received a full-price offer less than twelve hours after the ‘For Sale’ sign was planted out front.
My house is smallish at 1775 sq. ft. but easily large enough for a family of four. It was built in 2004 by Sunterra Homes for about $260,000, and this price was average for all the houses in my neighborhood. The house was certified Earth Advantage Platinum with features including, passive solar heating, Forest Stewardship Council (FSC) lumber, zero-VOC paint, hydronically-heated concrete floors, solar water heating, photovoltaics and much more. (Full details on the house can be seen HERE.)
When setting the price, I worked with Earth Advantage Brokers Jason Boone and Terry Skjersaa. They investigated recent sales in the neighborhood and reported prices ranging from $95 to $100 per sq. ft.— establishing the market value at $177,500.
To estimate the value of the green elements, I used the Appraisal Addendum created by EAI last year. This form allows home sellers to list green features and assign a dollar value to each one. I used the installed cost, and the green features in my home totaled $46,000. Added to the base value of $177,500, the $46,000 in green features established an upper limit of $223,500.
Home prices in Bend are now at their lowest level since housing bubble burst. Realistically, I didn’t expect to receive the full value after the Energy Addendum addition, so on the advice from my brokers, we set the price at $209,000— $31,500 higher than the established market price.
We brainstormed ideas for maximizing the green message, and the plan included these elements:
- Asking that a buyer’s brokers contact the listing brokers before showing the house. This gives the listing broker a chance to tell the green story.
- Putting together a detailed binder with the full list of green feature, as well as usage records for electricity, natural gas and water.
- Holding a brokers open house at which I would be present to explain the green elements. (Having a seller present at an open house is highly irregular, but seemed appropriate in this case.)
- Placing collateral throughout the house to explain specific green elements, especially those that aren’t visible.
Finally, we had to keep in mind that green was far from the only selling feature. In fact, location, amenities and comfort were really the principal selling messages. We were prepared to address those topics first and then bring the green messaging into the mix to close the sale.
The house was posted on Wednesday morning, and at about 9 p.m. that evening, I heard that a full-price offer was in the works. I happy to report the sale is officially closed and the process is complete.
Several studies by EAI and others have shown the additional market value of green homes, and my experience is a direct testimonial to this data. In a down market, my house received a higher price and sold faster than any home in the neighborhood. It’s one example that you can capture the green premium when you are supported by a talented group that includes a thoughtful builder, an effective sales team and Earth Advantage Institute.
Image Courtesy of Bryan Hilts, Cloudnine Photography