What is a Home Energy Score
On December 14th, 2016 The Portland City Council unanimously passed policy requiring homeowners to obtain energy audits before selling their home. The new rules take effect January 1st, 2018 and instruct Portland-area homeowners to take the following steps before listing:
- Obtain a home energy performance report, including a home energy score, from a licensed home energy assessor.
- Provide a copy of the home energy performance report to all licensed real estate agents working on the seller’s behalf.
- Include the home energy score and attached home energy performance report in any real estate listings.
- Provide a copy of the home energy performance report to prospective buyers who visit the home while it is on the market.
- Provide a copy of the home energy performance report to the City of Portland for quality assurance and policy compliance.
The City Council has considered similar measures since the mid-nineties and revived the policy at the behest of then-Mayor Charlie Hales. Despite unanimous approval among council members, the local real estate industry fiercely opposed the new policy.
Under the new policy, the council hopes to speed progress towards meeting the goals laid out in its 2015 climate action plan. This requires a city-wide carbon emission reduction of 80 percent by 2050. According to the city, residential homes account for 50 percent of local carbon emissions. Councilors believe that mandated inspections will encourage more homeowners to make energy-saving improvements which will ultimately reduce overall emissions.
Early on, The Portland Metropolitan Association of Realtors came out strongly against the ordinance, arguing the new policy was costly and wouldn’t ultimately change consumer behavior. Several organizations argued the new rules would hit low-income sellers especially hard. Local building firms wanted new homes exempted as they already met stricter energy usage requirements. Many of these concerns were addressed through exemptions but in the city’s view, consumers would ultimately benefit from this new information.
With full implementation less than a year away, a few unanswered questions remain:
- Will there be a sufficient supply of certified auditors to fill the new demand? In our local market, we’ve already seen home sales delayed due to a shortage of qualified home inspectors. At this point, there’s no reason to believe this will be any different.
- How much will these audits really cost? The city says the average price of a home audit currently sits at $150-$250 and believes the price won’t rise. It’s unclear if this will hold true once the requirement takes effect.
- How will this rule affect consumer behavior? Will a poor energy ratings be a detriment to home values and require sellers to undertake expensive repairs? How will energy ratings impact home sales when the real estate market eventually cools?
These questions likely won’t be answered with any certainty until the rules have been in place for some time.
Listing Now Makes Sense
This ordinance won’t impact sellers this year. And when you add in the high demand, low supply, and rising home prices of the current market, it’s a great time to sell your home. If you’re interested in learning more about how your home fits in the market, call us today at (503) 495-3721. We’d love to talk with you! In the meantime, we’ll continue monitoring these new rules and their impact on the Portland market and report back with updates.
Take a deeper dive into Portland’s home energy score requirements by following these links: