What Agents Need to Know about 'Green Features' and Selling Existing Homes

A sustainable, environmentally responsible lifestyle is becoming increasingly important – especially among younger and more affluent home buyers. One big question in the housing industry is, “Will buyers pay more for a home that has green features?”


For listing agents, the questions are slightly different: “Should asking prices be higher for a home with green features?” And “What should you tell your sellers when they ask you for guidance about adding green features to a home?”

The Shelton Group, which tracks consumers’ attitudes about sustainable choices, has looked at the green home trend for more than 10 years. Shelton Group President Suzanne Shelton recognizes that the home price question is a tricky one.

“The consumer segment we call True Believers—about a quarter of the population—has really bought into the idea of more sustainable, efficient, healthier homes. They see it not only as something good for them and their families, but as a way they can do their part to make the world/environment a bit better,” Shelton told Builder Magazine. “They tend to be on the affluent side and consistently tell us they would pay a price premium for a home with sustainable, efficient features. Our guess is the most you can get is a 5 percent to 10 percent price premium.”1

Shelton also notes that a UC Berkeley/UCLA study of 1.6 million home transactions found that green labeling improved selling price. Controlling for all other factors, researchers found that the 4,321 certified energy-efficient homes sold at an average price premium of 9 percent.1

Energy-efficient features may make a lot of sense to builders of newly constructed homes, but for existing homes the cost of adding green features can be high. For example, the national average up-front cost to install solar panels is $17,000.2

Real estate expert Brendon DeSimone says, “In the case of a resale, it’s difficult for the seller to recover the costs, dollar-for-dollar, of solar panels or a high-tech thermostat. The expense of that upgrade is built into the value of the home, just like the remodeled kitchen or other features.” But this represents the best scenario for buyers, who can receive the value of the green feature, and appreciate any coolness benefit at the same time.”3

Of course, there are some green home improvements that are less costly, and may appeal to home sellers and buyers. For example:

  • Adding insulation to the attic and/or caulking or weather stripping windows and doors are fairly inexpensive home improvements.
  • If appliances need to be replaced anyway, a seller may want to consider buying appliances that meet Energy Star standards.

Inexpensive improvement may make sense for your home-selling clients. More costly green features may or may not be a good idea too. It all comes done to the unique situation. The decision to either sell a home “as is” or add green features must be based on each homeowner’s circumstances and personal finances.

Stearns is here to help you and your clients with their home financing needs. Contact me today to learn more.

Source materials:

  1. What Buyers Want—and Don’t Want—in a Green Home. Jennifer Goodman. Web 05 Mar. 2014. Web. 24 May 2016.
  2. Everything You Need To Know About Adding Solar Panels At Home. Web. 17 May 2014. Web. 31 May 2016.
  3. Green Features: Do They Sell a Home? Brendon Disemone. Web. 18 Apr. 2016. Web. 24 May 2016.


- By Lauren Howey, Jun 28, 2016