GREEN BUYERS, TENANTS, OWNERS, AND SELLERS4

In This Chapter

The green buyer, tenant, owner, and seller

Listing and marketing the green property

Disclosure issues

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The Green Home Buyer

More than 90 percent consider energy efficiency important

Source: National Association of REALTORS®, 2007 Profile of Buyers’ Home Features Preferences, http://www.realtor.org/BuySell.4-2

The Green Home Buyer:Energy Efficiency

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Attuned to energy efficiency:– Repeat buyers– Buyers of new homes (new construction)– Older buyers– Foreign buyers

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71 percent are female

Two-thirds have an annual income over $50,000

Average age is 45

Married

Highly educated

The Green Home Buyer:Demographics

Source: McGraw-Hill Construction, 2007 The Green Homeowner, Attitudes & Preferences for Remodeling and Buying Green Homes, SmartMarket Report, http://www.construction.com

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Green Motivation: Home Buyers

Source: McGraw-Hill Construction, 2007 The Green Homeowner, Attitudes & Preferences for Remodeling and Buying Green Homes, SmartMarket Report, http://www.construction.com

Operational cost

Environmental concerns

Occupant health

Green Motivation: Tenants

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Indoor air and environmental quality improvement

Corporate environmental commitment

Value of public relations and free publicity

Greater workforce productivity

Operational cost savings from energy efficiency

Source: The Dollars and Sense of Green Retrofits, joint study by Deloitte (http://www.deloitte.com/us/responsibility) and Charles Lockwood (http://www.charleslockwood.com), 2008.

Types of Green Clients andCustomers

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Economizers– Operating cost savings– Worthy investment

Investors– Making money– Cost-benefit analysis and value proposition of green

home and building features Health Conscious

– Potential health benefits

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Types of Green Clients andCustomers

Idealists– Social responsibility– Truly committed– Willing to sacrifice

Lifestyle-Focused– Living by sustainability principles contributes to

meaningful and comfortable personal lifestyle

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Types of Green Clients andCustomers

Eco-Chic– Status and prestige– Being involved, owning the latest green feature or

gadget– May not truly subscribe to green philosophy

Skeptical/Unaware– Skeptical of green hype– May not agree with philosophy– Not aware of or uninterested in the options and potential

benefits

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Addressing Green Potential

Low cost examples:– Using CFL or LED lightbulbs– Install a programmable thermostat

Medium cost examples:– Replace carpet with no-VOC style– Consider xeriscaping– Install window shading to manage heat loss or gain

High cost examples:– Install solar hot water heater– Replace windows with double pane, low-e models

Conduct research

Prioritize showings

Use checklists

Offer observations

Ask questions

Adjust approach

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Helping Buyers and Tenants Find a Green Home or Building

Presenting Information

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Be careful

Do not position yourself as an expert

Establish boundaries

Give client a sense of factors to consider

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Presenting Information

Do NOT say:– “This is a green building…” – “This Indoor Air Quality will be good for worker

productivity.” – “This is a high-performing energy efficient home.”– “The property’s low-e windows, no-VOC paint, and

bamboo floors make this a good choice.”– “Southern facing exposures are best.”

Green Designee Obligations

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Don’t market or describe a property simply as a “green building” or “green home.”

Do find out what green features are most important to your buyer.

Do keep current on green issues.

Don’t overstate your knowledge.

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Green Designee Obligations

Do encourage purchasers to engage expert advice.

Do review seller’s property condition disclosure form and provide it to purchaser.

Don’t just look for eco-friendly and energy efficient building features.

Green Designee Obligations

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Do remind seller to comply with any duties imposed by local, state and federal laws related to environmental issues

Don’t guess, make predictions, or state opinions about green issues as if they were fact.

Leasing and Management

Property operations and maintenance

Employee and tenant satisfaction

The bottom line

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Leasing and Management

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In Figure 4.6, projects with greatest impact included:– Converting lighting to new generation high-efficiency

fluorescent lamps– Installing variable speed drives on all devices using

electric motor– Installing power strips that used motion detectors– Installing satellite-controlled irrigation system– Installing waterless urinals– Optimizing ventilation system– Running parking garage exhaust fans only during high-

volume periods

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Employee and Tenant Satisfaction

Morale booster for employees

Support company’s social responsibility commitments

Make a statement

Help enhance employee productivity

Exercise: Case Studies

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This exercise focuses on identifying various issues in working with the green buyer or tenant, as well as strategies to address them.

In groups, review the following scenarios and answer the questions that follow.

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Disclosure

Start with your state’s agency requirements

Tell buyer when situation requires an expert

Disclosure responsibilities extend to green and non-green property conditions

Disclosure

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If you are representing the seller, encourage him or her to disclose all material defects completely

Defects or conditions are material if buyer would consider them important in decision to purchase property

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Disclosure

If you are representing buyer:– Disclose material defects of

which you are aware– Investigate any aspect of

property that buyer client identifies as important

– Don’t rely on seller’s claims

Greenwashing

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Claims made without a verifiable positive effect to the environment– Exaggerating green features and

environmental benefits

– Misleading customers on benefits and value

– Stating opinions on green features as fact

– General and vague claims

Use caution and avoid greenwashing

Marketing a Green Home orBuilding

Focus on established certifications and ratings

Avoid vague descriptions

List specific features and facts

Point to benefits for all buyer types

Provide supplemental information and education

Look for opportunities

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Mark of distinction

Communicates baseline expectation

Provides assurance criteria have been met and approved by independent party

Ensures holistic green home or building approach

Focus on Established Certifications and Ratings

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Avoid Vague Descriptions

Generic descriptions do not effectively communicate green issues

Examples of generic descriptions include:– “Sustainable building”

– “ Environmentally friendly home”

– “ Natural materials”

– “ Safe paint and carpeting”

– “ Low utility bills”

– “ Healthy”

List Specific Features and Facts

Communicate meaningful and relevant information

Provide specific, verifiable, and quantifiable details

Examples:– Four dual-pane low-e windows

– ENERGY STAR dishwasher and refrigerator

– Solar-generated power

– No-flush urinals

– Paints and finishes with low- to no-VOC content

– Insulated exterior doors4-28

Point to Benefits for All Buyer Types

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Appeal to buyer’s motivation Highlight a variety of benefits Examples:

– Batt insulation to improve comfort and maximize energy efficiency

– Features trendy organic rooftop garden

– Easy access to bike trails, public transportation, and shopping – just blocks from city center

– Non-toxic, low-VOC carpet to help improve air quality

Opportunity to help educate buyer on unique or complex features

Examples:

– Brochure with explanation and diagram

– Photographs

– Links to additional information

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Provide Supplemental Info & Education

Look for Opportunities

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Identify features that contribute to overall green nature

Look for “quick tip” green home staging opportunities

Examples:– Use chemical-free, vegetable, or

homemade soaps– Consider soy candles – Check for leaky faucets– Unplug appliances and chargers

Pricing a Green Home

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Difficult due to lack of available data

Initial data indicate that environmentally certified (ECert) homes sell faster and for more

Source: GreenWorks Realty ECert Report, www.greenworksrealty.com.

MLS Adaptations

Many Multiple Listing Services (MLSs) are adding green search features

Allows agents to quickly sort through listing data

Some markets express concern, but overall interest in the concept

Case Study: Portland Regional Multiple Listing Service (RMLS)

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Exercise: Marketing the Green Home

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This exercise focuses on crafting marketing messages for green homes.

Working in groups, develop a marketing ad for the property.

Locating Service Providers

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Help find qualified service providers

Connect with local green experts

Your reputation relies upon your recommendations—investigate

Examples:

– Residential Energy Services Network (RESNET) for certified energy raters, local chapters/organizations such as USGBC and NAHB, water boards