Vol. 4, Iss. 14, Improving Your Business: Energy Efficiency in the Home

by Chicago Agent

By Don Shea

A home’s energy efficiency is becoming an important factor in today’s home sales. Heightened energy costs are changing the affordability of a house, and buyers are noticing. According to the U.S. Department of Energy, the typical American family spends more than $1,600 a year on home utility bills, 68 percent of which goes to space heating and appliance bills. This figure will jump to $2,000 per year after ComEd’s 24 percent rate increase.

As real estate professionals, we need to explain the benefits of smart, energy-efficient improvements to both buyers and sellers. Homeowners should think about the benefits of an energy renovation for their homes to create a competitive advantage when it comes time to sell. The 2005 Energy Disclosure clause requires sellers to reveal their last few months of energy costs, meaning the inefficiency of a home can no longer be quietly concealed. Buyers expect this information to be available and want to know what it costs to operate each home they view.

When assessing the efficiency of a house, I find it helpful to look at four major elements: windows, insulation, appliances and a home’s orientation.
1) Windows and casements

Older windows are basic and inefficient, whereas newer models contain advanced materials and high-tech construction. These features allow less air to escape and retain a home’s warmth more successfully than earlier models.

2) Insulation in the roof
I spend time in the attic to evaluate how well insulated it is. Newer insulation tends to have a higher R factor, meaning less warm air escapes during the winter. Homes with poor insulation are easy to spot: They tend to have the least amount of snow on their roofs.

3) Appliances
A house from the 1950s might have brand name components in good working condition that were installed in the 1990s. But a new or renovated home contains the very latest technology, which is a huge advantage for buyers. I always ask sellers for a copy of their utility bills so that buyers know what to expect from a home’s heating or air conditioning costs.

4) Orientation of the house
It’s a situation you can’t change, but knowing what’s optimal may help you sell a home. All else being equal, houses on the south side of east/west streets and the west side of north/south streets tend to have lower energy costs. This is because the most frequently used rooms, the family room and kitchen, are typically in the back of the house, which is exposed to sunlight the longest. Sun exposure makes a surprising difference in the winter and can substantially lower heating costs. Granted, it makes for hotter rooms in the summer, but families tend to live outside then, so it’s not as big a deal.

Obviously, there’s more that should be inspected by a licensed home inspector. When advising sellers on energy improvements, it helps to assess how well the house has been maintained. Newer homes feature more livable space with a central heating system, whereas older homes often have multiple heating systems for additions made after the house was completed.

A finished basement can help keep the first floor warm, just as an insulated attic helps keep the second floor warm. Although it’s unrealistic to ask sellers to renovate a roof or refurnish their basements, we can encourage them to add insulation in the attic or to install a programmable thermostat, which manages the home’s temperature throughout the day.

Other renovations include upgrading old appliances for Energy Star models, which use 10 percent to 50 percent less energy and water than standard models. The top energy culprits are washer/dryers, refrigerators, humidifiers and dishwashers. Swap any of these with greener models and notice an immediate difference in your energy bill. Before long, the energy savings will more than cover the cost of the new appliance.

These small details contribute to the smart use of a house and are investments that pay off. As energy-conscious homes become a more dominant presence in the housing market, buyers and sellers will only increase their demand for energy-efficient systems. Sellers will get a higher return on their homes if they recognize where energy consumption trends are headed and make conscientious improvements.

Don Shea is a Realtor with Coldwell Banker Residential Brokerage, Evanston office. He can be reached at

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