Why Energy Efficiency Matters for Home Sellers

Why Energy Efficiency Matters for Home Sellers


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Energy Efficiency

Today’s home buyers have begun to take notice of the importance of energy efficiency. Seeing the benefits in both the practical savings and cost effectiveness that energy efficient appliances are able to bring and provide, the pros to such designs are seemingly endless.

For this reason, energy efficiency is a big issues for both home buyers and home sellers. In the article below, we review why investing in such appliances can make sense.

Benefits to the Mortgage

One of the benefits to energy efficient homes that homeowners might not realize is that energy efficiency can actually help improve the homeowner’s mortgage. The Federal Housing Administration announced in late 2015 that borrowers are eligible to qualify for what is known as a “stretch ratio” at 2 percent only if the home has a United States Department of Energy Home Energy Score of six or greater.

What this means is that if the home that a home buyer is interested in buying is eligible for this stretch ratio, then the home buyers can potentially look at a house that has a value of nearly $27,000 more than what they originally could afford.

In other words, energy efficient homes are seen as being important enough to the FHA that the department is able to offer better mortgage opportunities for such homes.

Nearly All Homes Are Not Insulated Properly

Recent research provided by Boston University’s School of Public Health has shown that 90% of all current homes are not insulated well enough. This means that they don’t have enough insulation to meet the minimum requirements for energy efficiency. The implications of this can be extremely costly to the homeowner.

Improperly insulated homes are expensive. When a home is not insulated correctly, air conditioning and heat pass out of the home more easily. This leads to these systems having to operate more heavily, thus costing the homeowner much more in electrical and utility costs. These costs add up over time.

Even though insulation is not easily seen, it should mean “out of sight, out of mind.” Homeowners should pay attention to the insulation in their homes, particularly in windows and doors. The environment and their wallets will be grateful.

Fiberglass Insulation

Recent research has also shown that fiberglass insulation is able to provide the greatest return on investment for the homeowner. In fact, fiberglass insulation was shown to provide a ROI even greater than what a remodeled kitchen and bath was able to provide for the home owners. On average, fiberglass upgrades saw a value increase of $1,482 while costing only $1,268 to implement.

While the importance of energy efficiency is becoming more well-known, action still needs to be taken by the majority of today’s homeowners. For those who are still skeptical, energy efficient upgrades are one of the best ways for homeowners to decrease their overhead costs of living while increasing the home’s resale value. If homeowners are ready to save and rebuild their wallets, looking at energy efficient home improvements can be a viable path.

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