Builders looking for ways to sell more high-performance green homes for more money can glean insight from the February issue of Professional Builder magazine. In it, Suzanne Shelton of The Shelton Group summarizes research from the company's 13th Annual Builder Pulse Study. The study asked homebuyers a series of questions designed to reveal what they actually thought and knew about green homes, and how much they were willing to pay. 

The study got responses from more than 2000 of what Shelton calls "Energy Savvy homebuyers." Shelton's researchers also polled 100 builders—drawn from the Pro Builder and EEBA audiences—to gauge how well they understood this market.

Here's our take on three of the main findings.

1. Most buyers can't clearly define what constitutes a "green" home or what the must-have features are. And, the features they do list as essential don't match those on most builders' lists. For instance, just 38 percent of buyers said a green home had to include a high-efficiency HVAC system, something all builders understand is needed.

There was also some confusion when it came to terms like “green,” “high-performance,” “sustainable,” and “net-zero.” Builders who assume that buyers understand these terms risk losing sales.

Shelton's advice is to remember a fundamental but sometimes ignored sales and marketing principle: emphasize benefits. Focus on selling a comprehensive package that promises quality, comfort, health, and peace of mind, while also showing buyers how your homes deliver those benefits. "And avoid industry jargon and green speak."

That, of course, means emulating what the most successful green builders are already doing, and what EEBA has long promoted at its conferences and trainings.

2. Buyers will pay more for green construction than builders think. Shelton says that while nearly half of respondents indicated a willingness to pay 6 to 10 percent more for a green home, two-thirds of the builders surveyed believed they would pay no more than an additional 5 percent. About a fifth of the builders surveyed doubted buyers' willingness to pay any extra.

This finding confirms to us that builders who don't properly market these homes are leaving money on the table.

3.  Customers want to do business with companies that take a stand on issues they care about. When it comes to green building, they want to be able to tell their friends, family, and associates that their builder is a company known for its environmental commitment.

Shelton says that builders that want to be known for that will design homes with materials that are visibly green—items like rooftop solar, reclaimed wood walls, and learning thermostats—and will highlight those in their marketing materials.

In an age when people increasingly use social media to seek public approval, builders who help them do so will reap rewards.

The Professional Builder article includes a number of additional valuable insights and is well worth a read. You can find it here: https://www.probuilder.com/shades-green-how-builder-and-buyer-views-sustainability-diverge

by Jan Green

High performance homes offer benefits every homeowner wants, including lower energy bills and better indoor air quality. These homes tend to sell more quickly and for more money than comparable, code-built homes, but only if they're correctly marketed. That includes describing them correctly in your real estate listings and working with an agent that knows how to list and sell these types of homes.

Unfortunately, some builders choose to ignore this advice. For instance, a basic rule of marketing is to emphasize features and benefits the buyer cares about, but I've seen more than one listing with sentences like this: “Solidly-built 2018 structure has Ballard engineered trusses, 8-inch LPI floor joists on triple 2X10s over concrete block piers built by a licensed masonry company. Home is dried in with Pella windows.”

Your competition will know what that sentence means but the average buyer won't, and will have to stop and ask why those terms are significant and why you're mentioning them. That puts you in violation of another basic marketing rule, which is to use messaging that's easily understood by the average buyer. (You can still make technical information available to buyers with construction knowledge, but put it in a linked document so the average buyer isn't forced to wade through it.)

In fact, homes that actually sell more quickly and for more money are those that are marketed in a way that helps buyers easily understand the features and benefits relevant to them. Such marketing will also help realtors, appraisers, and lenders fully value the homes.

An obvious example is that of energy savings: according to a 2017 study by the National Association of REALTORS, 84% of home buyers are either concerned or somewhat concerned about their energy bills. When writing a listing or designing a piece of marketing collateral, it will be more effective to lead with the fact that the home can offer an annual electric bill of zero dollars than with an industry term that needs explanation, like Net Zero Ready.

The same principle applies to indoor air quality. Say for instance that a home buyer has a child with Asthma. A listing that says the home uses no-VOC paints and has a tight building envelope and mechanical information won't leave a strong impression and may, in fact, confuse them and cause them to look elsewhere. It's better if your listing simply states that the home is designed and built to provide “healthy indoor air.” When the buyer asks you how it does that, you can get into those features.

The bottom line is that if you're a high-performance builder you need to make sure that your listings have the right message and that your realtor can accurately present your homes. The following five steps will ensure that.

1. Start by listing every high-performance feature in your homes including their benefits to consumers.  Examples might include:

• Energy Efficient appliances and high SEER HVAC systems that use less electricity
• Advanced insulation and air sealing that makes the home easier to heat and cool
• A water recirculation pump that ensures instant hot water at the tap
• WaterSense-rated shower heads that use less water while still providing great showers
• No or low VOC paints that do not put chemicals into the home's air
• A radon mitigation system that keeps cancer-causing isotopes from getting into the home
• Climate-specific landscaping that needs less water and is easier to maintain than a lawn

2. Make sure your marketing materials highlight these features and benefits with easy to read fonts and graphics.

3. Locate and hire a real estate agent who has been trained to understand high performance homes, preferably someone who has earned the GREEN designation from the National Association of REALTORS® (NAR, GreenResourceCouncil.org) or the EcoBroker designation (EcoBroker.com.) These agents are trained to identify features that go above and beyond code-built homes.

An agent with this training can walk into a home under construction and recognize things like the insulation type and the home's non-toxic features, and will also be able to explain the full benefits of certifications like Indoor airPLUS or Net Zero Ready. An agent without this training won't be able to effectively communicate this information to buyers.

4. Make sure your agent highlights the relevant features and benefits on the listing on the local MLS and other listing sites.  If the listing site has a place for documents, upload the entire list of features including the HERS certificate, green building certificate, and any others you have earned.

To see examples of high performance home listings, go to GreenHomesForSale.com, VivaGreenHomes.com, and USGreenBrokers.com.

5. If the local MLS doesn't have the fields available to highlight high performance home features, ask your realtor to create a work group to assist the MLS in creating these fields. (I started such a workgroup in Phoenix in 2009 as part of my volunteer work with USGBC.) For information and examples, visit GreenResourceCouncil.org.

If you build high performance homes, you should be working with an agent that has a comprehensive understanding of those homes and can explain their features and benefits to buyers. Remember that the agent is your representative and works with you as a fiduciary, so you need to make sure they fully understand your approach to building. The value such an agent brings to the sale will mean more profit for the builder.  

Jan Green is a realtor in the Phoenix area who specializes in high-performance home sales. She has earned EcoBroker and NAR Green Designations.