Dear Monty: Six energy tips to save money when buying a home
Reader Question: We saw an open house we like. The agent did not know the cost of energy when asked and has yet to produce numbers. The agent contends, “Every family is unique, and the costs will vary from owner to owner.” My husband just wants to make an offer; I am concerned they are hiding something. What can we do?
— Becky C.
Monty’s Answer: Every family does use energy differently. Some families put on a sweater instead of turning up the heat. Others like 75 instead of 68. Some are conscious of turning lights off when not in use and others not so much. Usage drives utility costs so many factors will affect energy costs. If the house is not energy efficient now, even if you manage your energy preferences better than the current owner, you will still spend more money on energy than you would if the home was energy efficient.
Six energy tips to help you save money
Utility companies will often release those costs when requested. Call the utility company to find out. Many utility companies have online tools to discover issues in a home and assist with programs to reduce the cost of improvements that save energy. Do an online search for their website and check it out.
Ask the seller some questions to get a sense for their energy awareness. For example; have you ever had an energy audit completed? Are there specific areas in the house that experience temperature variations? Have you ever added attic insulation? If the homeowner is dealing with such issues, the house may already be partially updated.
Furnaces have an annual fuel utilization efficiency (AFUE) sticker. If they have an old furnace or bought a furnace with an 80 percent AFUE rating instead of a 98.5 percent rated unit, it could indicate they are not energy aware and you can plan on added expense going forward to create energy efficiency.
The IRS also offers assistance. Eligible equipment can receive a one-time tax credit on your income tax return of up to $500.00. You can learn about how to qualify on the IRS website at http://1.usa.gov/1Wzvn3U
An energy audit provides detail not found in a home inspection about the efficient of a home. An audit also reveals what can be done to improve energy efficiency. In addition to a home inspection, an additional contingency for an energy audit may be a good idea if you suspect there are issues or the seller is not forthcoming. Energy audits are expensive and can take 3-6 hours to complete. Expect to pay $500 or more as the seller will likely not pay for it. Learn more at http://energy.gov/energysaver/professional-home-energy-audits. Because of the cost, another option is to do the audit yourself after you own the home. Here is information on a DIY audit http://energy.gov/energysaver/do-it-yourself-home-energy-audits.
The U.S. Department of Energy states the average annual home energy costs are $2,000 and conservation can save between 20 and 30 percent on your energy costs annually.
You can make it clear to the agent energy information is important to you and push for a commitment on receiving the data, or you can take a hard stand; no bills — no offer. Lastly, you can make an offer.
Food for thought
The fact you are concerned is positive. Here is a story to share with your husband that may help him see the situation differently.
E.ON, a large electric and gas utility company in England commissioned an independent survey in March 2016 of 2,000 customers who had purchased in the past five years. They call it the “Head over heart” report. The findings showed that Brit’s are more concerned about the feel of a house (36 percent) than its likelihood of water leaks (30 percent) or the amount of improvement work required (22 percent).
The customers were asked to estimate how much they spent on improving their current home’s energy efficiency after they’d moved in. In converting British pounds to U.S. dollars, they estimated they spent $3,624. One in three said they placed little importance on energy efficiency measures when looking at property for the first time. One might expect different results were this survey conducted in the United States, but my personal experience is many homebuyers allow their emotions to trump their logic when caught up in the home buying experience.
— Richard Montgomery gives no nonsense real estate advice to readers most pressing questions. He is a real estate industry veteran who has championed industry reform for over a quarter century. Send him questions at DearMonty.com.