Will Home Energy Upgrades Raise My Sale Profits?

Considering the return on investment that might be gained by upgrading your home's energy systems and appliances.

With a possible home sale on your horizon, it becomes important to consider how much you will invest in home improvements and which improvements will most reliably raise your home’s value in the eyes of buyers. Home energy upgrades, such as insulation, thermal window panes, and solar panels are not typically visible to buyers, and thus may not get the immediate “wow” reaction that built-in stainless steel appliances or marble countertops would. They can, however, put a smile on future homeowners’ faces when they realize how much money they will save on utility bills.

How Interested Are Home Buyers in Energy Efficiency?

Unlike, say, adding another bathroom, it is hard to put a precise value on home energy upgrades. They are not the type of improvement that instantly raises a property’s value by a measurable amount. Nevertheless they increase a property’s value in a subtler way—by creating the likelihood of future savings. But it takes a savvy buyer to pick up this added value.

As more and more people start to upgrade the energy efficiency of their home—a.k.a green their home—awareness of the value of things like insulation, thermal pane windows, solar panels, and thermodynamic heat is growing. One thing that has driven this trend is the extreme weather trends that the world has been experiencing. With colder winters and hotter summers, oil heating and window-unit air conditioners are simply too costly to operate.

Not only are buyers looking at the square footage of a home, they are looking at how much it will cost to maintain that square footage. Statistics are showing that for every dollar saved to heat and cool a square foot of housing, the sales prices increases.

Which Energy Upgrades Will Result in the Most Savings?

Calling a professional is a good way to gather information on which home energy upgrades will give you the most bang for your buck. Your state’s energy and research development organization is a likely place to start.

These organizations offer a home energy efficiency audit. Typically, this audit costs about $300. But depending on your income, it may be free or offered at a reduced cost. At the end of the audit, you will receive a report that lists the areas of your home that are least energy efficient and suggestions for how you can fix them.

State government agencies also tend to offer grants and low-cost financing to homeowners who are willing to make energy upgrades to their home. Some grants match dollar for dollar up to a certain amount. Sometimes they include energy efficient appliances free of charge.

Here are some of the top energy-saving improvements that you can add to your home. These subtle changes will shave dollars on your home energy bills.

  • insulation
  • energy efficient doors
  • sealing air leaks
  • up to date cooling and heating systems
  • smart thermostat
  • energy efficient appliances
  • increasing natural sunlight in your home by adding windows and skylights, and
  • thermal pane windows.

How Do You Demonstrate the Difference in Value to Prospective Home Buyers?

Once your home energy improvements are complete, you will begin to realize the savings even before you put your home on the market. Keep a record showing the trend of your energy bills before the improvements and after. You or your Realtor can present the results in chart form to prospective buyers, allowing them to see the added energy-saving bonus.

While it is likely that upgrading your home’s energy efficiency will increase its sales value, many factors go into the selling price of a home. So if you are making these improvements simply for increasing the selling price, that is not a reason to make them. Traditional upgrades like a new kitchen or bath will likely lead to a higher return on investment. Still, if you plan to enjoy your home for some years before selling, or are committed to environmental values, making home energy upgrades is definitely worth considering.

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