Let’s Make Flipping Green Homes More Popular

Fully green-renovated 1963 home.

Fully green-renovated 1963 home.

 

When I decided to get my real estate license almost 5 years ago, I discovered that the National Association of Realtors has a designation for green realtors, which, as a LEED Green Associate, immediately caught my attention.  As soon as I was licensed, I took the course and received the Green Realtor® designation thinking it would help me carve out my perfect niche, the main takeaway of which for me was to promote the “benefits” of green homes such a health, comfort and potential savings on utility bills.  I knew it would take a while to establish myself as a real estate agent in this competitive market, especially in Southern California, but I thought this designation would help – not become a new challenge. 

There are certainly homes on the market with “green features,” often marketed as “high performance” or “smart homes.”  Given the stricter building codes in California than the rest of the nation, newly built homes have to meet higher energy performance requirements compared to older homes.  To receive the green features designation, we are taught to present the home’s benefits based on the triple bottom line:  people, planet and profit.  Green features provide benefit for people (and animals) by creating a healthier, more comfortable home environment; mitigate climate change by reducing the carbon footprint; and save the owner money in the long run.   

This began my journey of pondering what it means for me to be a “Green Realtor” and what green real estate looks like.  In order to deepen my knowledge to speak about green homes in a more compelling, yet not preachy manner, I started a podcast, Home Green Homes.­  Here I can talk to anybody who knows anything about green homes, green building practice, and even green real estate, and invite clients to listen and learn.  To date, I’ve interviewed architects, contractors, energy efficiency experts, designers, homeowners who converted their homes to green, and more.  My goal and intention is to share the various resources available for anyone to create “greener” homes, and to have a long term impact on the housing market.

(Note:  The word “green homes,” is often synonymous with “eco-friendly,” “sustainable,” and even “regenerative or restorative,” some of which are up for deeper conversation).

In order to maximize collective impact, I’ve been approaching both the supply and demand sides, educating the home sellers and home buyers about why they should be looking for green features. I also started networking to see who and where I need to be to find green homes and/or people who may be looking to buy green homes. There are many discerning homeowners who have taken steps to make their home greener and they did the work so they could reap the benefit for years to come as they live in such homes.

So, who is building green homes, or not?  In the residential market, more multi-unit building projects seem to be making progress in implementing green building practices. However, in the single-family homes market – except for planned developments by a few larger home builders – we don’t see many homes being built to be overtly green.  

Based on research released by the National Association of Home Builders, two of the top obstacles affecting more green single family home/remodel projects are (1) the “lack of home buyer demand for green homes” and (2) the “price premium to build/remodel or renovate green homes.”  For the home-flippers, money and time are the main drivers for rehabbing properties and put them back on the market.  They tend to have certain sets of process and materials they use in their projects.  The learning curve for them to build green seems to steer them away while they’re forced to keep up with the changing codes.  Yet, I must contest that there are discerning buyers out there, who would be willing to pay the premium if the properties are marketed with “benefits” of green features.

For instance, I sold a property loaded with green features at 14% above asking price.  The listing price was already higher than the comparable sales in the area, but I heavily promoted the green features and their benefit with data and actual stories.  Four of the top buyers were Tesla owners, valued the green features, and ended up in a bidding war.  Builders and flippers will start to see there is an increasing value in providing green features, which often cross over into smart home features.

While greener, healthier homes can potentially save money in the long run, we need to break the perception, bias or reality that building green costs more. There are tax and rebate incentives available for sure, but even then, those incentives are not good enough alone to drive people to choose green.  Those who do choose green, want something better for themselves and their families.  They may not know all the details of materials or energy saving options, for example, but hopefully I and my fellow Green Realtors can make it a more accessible path.  There’s a lot of work for us to do.  I believe the movement is now.  We just have to keep pushing forward.

 

 

About the Author

Izumi TanakaIzumi Tanaka is a GREEN realtor® with Latitude by eXp Realty. As a GREEN realtor®, LEED Green Associate, and GreenPoint Rated Advisor, Izumi serves the Southern California area.

Her vision is to wed mindful living with the built environment, and ultimately create thriving communities that promote health and resiliency for all of us as well as our planet. As an influencer in the real estate industry, she promotes the benefits of green home living. As a green home advisor, she helps owners improve their home’s efficiency and comfort whether they stay or sell. As a GREEN realtor®, she helps buyers find homes with green potential and regenerative features. As a flipper, she transforms homes into healthy living environments.

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