Using Green Home Features to Help Sell Homes

While the right location remains the top priority for home buyers, energy efficiency and low maintenance are rapidly moving up the list of things all buyers look for when searching houses. It is not just about leaving a small carbon footprint and better planet for future generations. Homes with green features save the owners a lot of money on utilities, make sustainable living easier, and are now getting their own unique kind of appraisals that put real value on the features. With all the focus and interest on reducing energy consumption, there is growing evidence that highly efficient homes sell faster and at a higher price than the competing houses. With that being said, here are a few of the top value green features.

Green features that make a home more appealing to buyers

• Natural light- Any feature that utilizes natural daylight inside the home. This can be as simple as a tubular lighting and passive skylights to the new sun-tracking skylights and floor-to-ceiling windows. When retrofitting an existing home, improving the natural light utilization is one of the least costly and most noticeable things a seller can do.
• High-value windows- Though top quality windows can be quite pricey, they are one of the features potential buyers appreciate most. Anyone who has owned a home previously appreciates the difference good insulated windows will make in utility bills. Most of the heat wasted in American homes goes right out cheap windows.
• Solar panels- The current generation of solar panels will pay for themselves in about 12 years. The payback is better with federal, state, or local incentives. Once the investment is recouped, these money savers require very little upkeep and continue to add value to the home.
• Energy ratings- Savy buyers are familiar with the significance of Home Energy Rating System (HERS) scores, EnergyStar and Leadership in Energy & Environmental Design (LEED) certifications. These ratings are rapidly becoming as important to home buyers as MPGs are to automobile buyers.

How to sell a home with green features

The term green has a negative connotation to some people. They associate it with low-quality products made of recycled material and government mandated changes. While younger buyers are more inclined toward environmental conscientiousness, older buyers are more interested in saving money. Rather than stick rigidly to terms like eco-friendly or green, find opportunities to use "high-performance" and "energy-efficient" when applicable.

Buyers are most interested in the opportunities for sustainable living in their own home and backyard than they are in saving the rainforest. While most people do care about the environment, there are daily essentials like food, warmth, and lighting that take president.

Federal Trade Commission's Green Guides

Not surprisingly, with buyers being motivated by green features, there are a number of unscrupulous people who are willing to use deceptive marketing to attract people. The FTC has recently updated their Guides for the Use of Environmental Marketing Claims. Any agent should be familiar with the guidelines and review all of their marketing for compliance. Basically, the FTC wants all environmental claims to be specific, measurable, and verifiable.

Most green features are more easily incorporated into new constructions. But you can still highlight features like energy-efficient windows, a high-performance HVAC system, and EnergyStar appliances. Make a point to mention walls painted with no-VOC paint. A non-toxic or low-toxic home is desirable to any family. Use placards throughout the house to draw attention to various features. It is easy for agents to get sidetracked when speaking and a lot of potential buyers will remember what they read more than what they hear. You can visit the NAHB Research Center for more information on having a home Green Certified.

Benefits of Buying Over Renting

The responsibilities of home ownership are a bit daunting to many people. Some folks spend their lives avoiding what they consider a financial burden; never experiencing the comfort, security, and thrill of owning their own property. There is a common misconception that people who rent are able to save more money than home owners. In reality, if someone is planning to live in the same location for at least seven years, itemize their tax deductions, and has good credit, buying a house is significantly less costly than renting.

Why those three factors matter

Buying is a much better option than renting in practically any major metro market of the United States. For many cities, the savings are calculated to be more than 50 percent, as high as 70 percent in some areas. Savings are this high largely due to the low interest rates. People in a 25 percent federal tax bracket also benefit from buying. Here is why the home buyer's situation, credit score, and tax filing matter:

• If they itemize their tax deductions, they are able to subtract the interest paid on the mortgage and their property tax payments from their pre-tax income. This is going to lower their total tax burden. The higher their tax bracket, the more they benefit. To not itemize will increase the cost of owning a home. How much it raises the cost of home ownership depends on the amount of interest and property taxes paid and the filer's tax bracket.
• Low interest rates make home ownership possible for people of all income levels. People with a good credit score qualify for better loan terms and lower interest rates than people with less than stellar credit. One percentage point on a mortgage interest rate results in at least a 10 percent higher monthly house payment.
• Each time a person buys or sells a house they encounter some transaction cost. These cost are spread out significantly for individuals living in a home for seven or more years. Therefore, their average monthly cost of owning the home is much lower than a person who owns the same house for less than seven years.

It is possible to get bogged down over-analyzing numbers and overlook the many other benefits buying a home has over renting. In addition to tax savings and having more space for the same monthly payment, there are some indirect benefits. Some are financial; some make for a better overall quality of life.

More security

Renters have a more tenuous relationship with the roof over their head than home owners do with theirs. There have been situations where the landlord had a mortgage on the property being rented and allowed it to fall into foreclosure. The tenants were forced to move through no fault of their own. Landlords can also terminate a lease for a wide variety of reasons.

Less stress

On the subject of landlords: Some are good. However, most property managers and landlords are stretched thin trying to cater to the needs of a lot of tenants. This can result in long delays before needed repairs are made. Renters are often stuck living with ongoing plumbing and HVAC problems. Home owners have more control over their situation. If they are not handy at repairs themselves, they have several contractors willing to compete for their business, and they report directly to the homeowner.

Consistent monthly payments

A fixed-rate mortgage can't go up, regardless of what happens with the economy or inflation. Renters can be easily edged out of their residence with increases in rent. People who lock in their monthly mortgage payments at an affordable amount are better protected from inflation than renters.

Renters often have to rent storage units for personal items. If they move frequently (renters often do), they may have to buy furniture with each move to fit small spaces. They often end up giving away many belongings or selling them for a fraction of their true value. Home owners typically have more space and buy less furniture. Perhaps home ownership isn't for everyone. But owning a home is an accomplishment. It brings with it a unique since of pride and emotional satisfaction like nothing else.

What Home Buyers Need To Know About Closing Costs

Closing cost are notoriously confusing to home buyers. Misunderstandings about these fees can lead to animosity toward real estate agents by their buyer clients. Those hard feelings result in the loss of valuable referrals from past clients, and perhaps, powerfully negative reviews shared by word-of-mouth and online. Your clients have a right to know how much they are paying for each service that is their responsibility. The Consumer Financial Protection Bureau (CFPB) is working to simplify forms and ensure home buyers clearly understand all aspects of the buying and mortgage process. Agents who explain closing cost to their clients in an authoritative, easily understood manner will set themselves apart from the typical real estate agent, and benefit from having their past clients enthusiastically recommend their services to others.

Closing cost are fees the buyer must pay in addition to their down payment. The following are typical closing cost charges that appear on the final HUD-1 settlement statement. For the buyer they should appear in section J of the settlement statement. Some charges may be paid out-of-pocket by the purchaser prior to the day of closing or will be paid with the loan. Those should appear in the 200s lines. The total the buyer needs to bring to the closing table is at the bottom. It is the total amount found on line 120 minus the the total amount of line 220.

Loan origination Fee

This fee is typically tax deductible. The loan originators are often paid based on the loan origination fee. It is negotiable and they may lower the fee just to get the business.

Loan discount

The loan origination fee buys down the interest rate by providing the lender with some money upfront. Each point is one percent of the mortgage amount. How much one point lowers the interest rate varies.

Document preparation fee

Also negotiable; some lenders do not charge for compiling the necessary documents.

Administrative fee

This fee typically covers the underwriting and document preparation fee. It is also negotiable and the amount varies by lender.

Funding fee or Wiring fee

This charge was unheard of years ago. Many consumer advocates say it is the lender's responsibility to get the money to you. Buyers should request they waive the cost of wiring the loan money to the closing agent.

Credit report

The lender or broker pay an outside company to complete your credit report. Some will try to make money themselves on the report by padding the actual cost. You can ask for a receipt to know the exact amount.

Appraisal fee

A professional appraisal is needed for purchase loans and for most refinance loans. It is another fee that is paid to a third party and the lender should not be inflating the cost to make money. Buyers can again ask for receipts and refuse to pay any upcharges.

Flood certification and hazard insurance

The flood certification fee is a survey done by an outside company to see if the home is located in a flood zone. Hazard insurance is required to protect the collateral of the loan. Buyers are not required to pay for an entire year upfront. Most lenders are satisfied with two to four months of coverage at the time of closing.

Recording fees

The county clerk charges this fee to officially record the purchaser as the new owner of the property. If the buyer refinances with a different lender, the fee will be necessary to change the lender's name on the record.

Tax stamps or recordation tax

When a property changes hands, it gives government an opportunity to charge a tax based on the purchase price. The amount is sometimes less for first-time buyers. Whether or not it is charged on refinances varies by county. Some charge based on the difference between the new and old loan.

Release of lien fee

The is charged by the closing attorney to have the county records changed to show that ownership of the property has transferred, and the previous owners and previous lender have no claims to the property.

Document prep and notary fees

Some documents must be notarized. Most attorneys have in-house notaries and still charge you for each page they notarize. Settlement agents, like the mortgage company, charge a fee for the legal documents they prepare.

Title search

This fee is charged for researching the history of the purchase property to ensure there is a clear title for ownership.

Closing fee

The charge for overseeing the closing and signing of all legal documents. The closing is typically held at the closing attorney's office.

The government does not regulate many of the fees charged by professionals in real estate transactions. It is important that buyers understand they have the right to shop around and choose the one offering the best rate.