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Housing Market: Mandatory Energy Efficiency Disclosure

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Energy efficiency when selling home

Energy consumption and conservation is becoming a more prevalent conversation with each passing day. These concerns translate into our daily lives with bills, usage, business costs, and more. Energy consumption and efficiency began as a concern regarding how factories and cars affected the ozone. But now it is a much more inclusive concern. One such area that was largely ignored for a long time is the housing market. Now, it has become a more prevalent concern. Even prompting mandatory disclosure of the energy efficiency of a house in some areas. 

Mandatory disclosure of the energy efficiency of a home is somewhat of a conflicted subject. Some say it is a good piece of knowledge for prospective buyers to have, while others say that it does not result in anything beneficial. Much of the concern lies in the various costs associated with this mandatory disclosure. It costs those looking to sell their home about an hour of time and $100 to $300. After the audit is complete, no further action is required.

At this point, all the audit becomes is information. If a prospective buyer does not care about this, then it is a waste of money for the seller. On the other hand, if energy efficiency is important to the buyer, the seller may be able to recoup the audit cost and then some as part of the sale. 

The Statistics Behind Mandatory Energy Efficiency Disclosure

There have been some studies regarding whether energy efficiency disclosure does affect home sales. But they have been on a relatively small scale. According to a report by Erica Myers, Steve Puller, and Jeremy West, “Quantitatively, homebuyers are willing to spend an additional $2,000–$5,000 to obtain an expected savings of $153 in annual energy costs, a plausible shift in relative housing prices.” Minimally, this displays that many homeowners, at least in this area, do find value in energy efficiency disclosure.

It also shows that they are willing to pay a bit more upfront to save money. Furthermore, the report goes on to discuss how energy audit information encourages energy-saving investments. The report states, “Using a similar approach, we demonstrate that the ECAD policy increases energy-saving home improvements made by both home sellers and home buyers. Specifically, the programme causes about a 31% increase in these investments by home sellers. And about a 12% increase by home buyers.”

The bottom line is that as energy efficiency and conservation become more prominent topics in our country, this disclosure will likely become more important as well. Even if it is not mandatory in a particular area, prospective homebuyers may begin asking about it themselves. After all, while it may involve a higher upfront cost, it can save them money in the long run. While energy efficiency disclosure is not mandatory in every part of the country, these policies are becoming much more common. 

Contact Us Today for All of Your Energy Needs

If you are looking for competitive pricing on your next electrical or gas contract. Or would like to become more energy-efficient, contact us today. We are a full-service energy consulting firm with over 15 years of experience dealing in energy procurement. As well as retail energy brokering, energy efficiency analysis, and more. Although,we are headquartered in Dallas, Texas. We also serve Pennsylvania, New Hampshire, New Jersey, New York, Illinois, Maryland, Massachusetts, and Ohio. Give us a call and let us help with any questions you may have. 

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