Energy Efficiency in Your Home

Are Energy Score Important?

More cities are requiring sellers to share home energy scores with homebuyers so they'll know how much energy a home will use, what that energy will cost them, and how efficient the home really is.

Portland, Ore., is the latest city to require a Home Energy Score for most home sales, joining other cities like Berkeley, Calif., and Austin, Texas. The scores, developed by the U.S. Department of Energy, give sellers credit for investments in energy efficiency and allow buyers to get an idea of their potential energy bills and plan for future upgrades. Starting in 2018, listings for most single-family homes and townhomes in Portland will be required to disclose a Home Energy Score.

Here are key facts real estate professionals and sellers should know:

• The score is based on the physical characteristics of a home, not the homeowner's energy use. By adjusting for climate and utilities, homes are compared only to other homes in the region.
• The score ranks homes on a 1-10 scale, where 5 represents the average home and 10 represents the most energy-efficient homes.
• The score attempts to takes the guesswork out of upgrade costs that a potential buyer might want to undertake. For scores lower than 5, for example, it recommends cost-effective ways to improve home performance.
• Offering this upgrade information may boost sales regardless of the actual score. A study by Earth Advantage found that just listing home energy costs boosted listing selling prices by 3 to 5 percent, and those homes spent 18 fewer days on the market than homes that did not offer this information. The results were the same even if the disclosed costs were relatively high.
• A lower score doesn't mean that a home is poorly built – many beautiful, well-constructed homes receive a 4 or less, Kernan says. The score is an indicator of opportunities for future owners to make improvements to reduce energy use. The home energy report includes a prioritized list of energy upgrade recommendations that offer the quickest return on investment.
• We encourage clients to work with an authorized, licensed home energy assessor to ensure the assessment and score are calculated accurately.