By Chris Chopik
Voluntary energy labelling of houses offers untapped potential for individual Realtors, brokerages and franchises to create value for home buyers and sellers. Think about the energy labels on appliances and cars and food. The market is used to seeing product and energy information and labels. So what does a voluntary building label look like in the real estate marketplace?
When you go to Realtor.ca you can search for a home with a pool or water frontage but what about solar panels and energy ratings? When you speak to your Realtor, can they inform you about energy ratings? When you go into an open house of a listed energy labelled property, is the information accessible and explained well? These are pieces of what a voluntary or market driven energy labelling process might include.
Joan Huzar, chair of the Energy Committee for the Consumers Council of Canada, says, “Consumers have a basic right to product information, including energy. Realtors should get behind energy efficiency – energy is not going away – and labels are a great way to communicate with consumers. Things that are cheap today will not be cheap forever. An energy label is probably not the tipping point in a buyer’s decision process but knowing if you are buying an insulated house matters.”
At a recent press conference for the release of his annual conservation report, I asked the Environmental Commissioner of Ontario, Gord Miller, about why he thinks mandatory home energy ratings are important to Ontario homeowners. He said, “Homeowners who have invested in energy efficient upgrades are not being represented by the real estate industry. In an Australian study, research found that homes that had retrofits or were built to a superior standard received a price lift at time of sale, while other houses’ values were not affected. In Ontario, information about home energy efficiency is not making its way into the buying and selling conversation. The government is failing to protect the interests of consumers by not implementing a mandatory time-of-sale energy label.”
Nevada has the most depressed building sector in the United States. A mandatory labelling system was introduced there as an experiment to stimulate regional economic benefits. The flawed legislation was rescinded in favour of a market-driven strategy that had Realtors and energy advisors collaborating on a legislative framework for a voluntary labelling system. So far this system is working, and like successes in other jurisdictions, the integration of labelling into the practice of real estate professionals is the critical enabler to a market-driven-energy-rating effort.
Even the Canadian Home Builders’ Association (CHBA), which was previously resistant to mandatory building labelling, has shifted its perspective. CHBA’s Dave Foster says, “While there are legitimate concerns on how to effectively implement a resale home energy label, it is important for buyers to receive energy related information from an objective third party. The cost of water, electricity and heating are available to new home buyers and I think it is becoming more important to the broader home-buying public. Our members are seeing an increase in public interest and we are in favour of mandatory labelling.”
I asked Jim Flood of the Ontario Real Estate Association (OREA) if the association had any programming, training or a change management approach to integrating energy into the practice of real estate. “There are some courses that are offered but there is no strategy or plan for a member engagement program around this issue. We think that our members will let us know if consumers start asking for the information. Our stance is that a voluntary approach is the right approach. If and when consumers ask for it, Realtors will find the information. ”
The Toronto Real Estate Board has delivered courses and made the energy rating a field on the MLS. Boards across the country including Calgary, Vancouver, Victoria and others have made an effort to include the information within the MLS. Now that the infrastructure has been put in place we need to start using it.
I believe our industry has a great opportunity to take a hard look at the real estate value of energy performance and create a strategy to bring this rating into our practice. Like every change that faces our marketplace, particularly when the government takes a strong position, we need to adapt and integrate emerging best practices. We do this to ensure that sellers and buyers continue to value our services and to ensure that we are delivering a great customer experience – which means knowing the energy score of a home and communicating it effectively to the marketplace.
Let your directors at CREA and your local board and provincial counterparts know what you think about this important issue. If you are interested in learning more about this issue visit my blog at www.ChrisChopik.com/Green-Renovation and www.KnowYourEnergyScore.ca.
Chris Chopik is a Realtor with Bosley Real Estate Ltd., Brokerage, and a member of the Green Business Community in Toronto. Email [email protected].
