Green Homes For A Green World

Have you heard about something called "Green Equity

?" If not, it isn't hard to understand. We know that real estate has value, and in a good market that value tends to climb year after year. The difference between what you owe and what the house will sell for is your equity. If the home is badly treated, however, the value of the home can be adversely affected. So, when it comes time to sell the home, there is often a frantic effort to fix everything up so that it will bring the best price. Why bother? Well, selling a beat up house compared to a nicely kept house is going to have some serious financial consequences.

Let me switch to talk about "Green Equity" in terms that I think anyone still curious about the Green premium will understand. First of all, let me ask what will be the impact of $5.00/gal on the sale price of a big, gas-hungry car (10+ mpg) compared to a fuel-efficient car (30+ mpg)? Will the price of the gas-hungry car go down while the fuel efficient car goes up? The answer should be obvious to anyone who understands market forces. Another way to explain the Green premium is would you pay one price for paint that fills your house with toxic fumes, or would you pay $5 more for similar paint that will not adversely affect the health of your family? I think that the answer is (or should be) obvious. If you figure the average cost of $250 to $500 per month for electric, heat, water, sewage, and trash; the annual bill is $3000 to $6000 a year.

Think about a normal house built in the typical way. We can calculate the standard cost of fuel, electricity, water, and even waste for most homes; and that becomes the expected financial add-on that we all figure comes with home ownership. On top of the cost of the purchase price for the home is the operational cost to live in that home. Year after year, we pay those costs without much thought. However, if you added up the cumulative costs for the running of a home; could it be a price that would shock us to a new reality? The ten year cost of running a home could easily equal a quarter to a third of the original purchase price. A $200,000 house could run $60,000 in additional payments over time.

What if those operational costs were 25% less, 40% less, 50% less or more? Would a $30,000 savings make one of two homes on the same block more attractive to buyers and bring a premium price? It is a question hardly worth asking. It is also important to realize that these expenses are not fixed. The cost of energy and other necessary services are expected to go up, and go up dramatically. This is a painful reality, that increases the premium value of a Green certified home.

There is an additional thought to consider, what if families will also value. Heath is a valuable commodity, and we are learning additional and more each day about how toxic-laden homes are harming the children that we are supposed to care for. With illnesses like allergy, asthma, ADD, ADHD and autism on the rise; there is broad assumption that these problems may be engendered in our children by exposure to chemicals and toxin from the day of conception forward. Frankly, no one can guess on the price of a healthy, happy child. Here again, if there is the anticipation that a Green home is superior for children in their influential years, what parent wouldn't prefer a Green home over a standard home.

Green Equity, then is a value of a home realized in many ways over the years of occupancy. If that Green home is maintained as a Green home, it will continue to add the Green premium value to the second, and third buyer as well. The Green Legacy Home offers something found no where else. Beside the construction of a superior home, the operation of the home is maintained year after year with the assistance of a Certified Green Consultant from the Green Business League. Builders, sellers, and real estate professionals are encouraged to think about using the Green Legacy Home program for any home that has been built or remodeled as a Green home.

by: Michael Richmond

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