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Home Pricing Guide

Living Green Goes Mainstream
Climate change. Carbon footprint. Biofuel. They’re terms that didn’t even exist several years ago. Now sustainable, or “green” living is on everyone’s mind. According to the National Association of Home Builders, even as the housing market has moderated in many parts of the country, the demand for green homebuilding and remodeling is exceeding the available supply—and that’s despite the fact that green homebuilding has risen 50 percent since 2004. So, why the sharp rise in popularity? Many are realizing that a lifestyle that uses less energy, fewer natural resources and fewer toxic chemicals is not only healthier for the planet, it’s also healthier for our families. The benefits of a green home A Healthier Home We spend most of our time indoors, so the quality of the air in our homes is important. According to the Environmental Protection Agency (EPA), the air inside the average home is two to five times more polluted than the air outside. One of the culprits is the advances in new construction. The “tighter” sealing is great for energy savings, but it also reduces the amount of fresh air entering our homes. That allows chemical fumes from paints, adhesives, carpeting and household cleaning products to build up. Using natural and low-toxic materials creates healthier indoor air, and can help reduce the symptoms of allergies, asthma and other respiratory ailments. A good way to start is to use cleaning products made from natural and non-toxic ingredients. If you’re remodeling, choose low-VOC paints and stains to reduce toxic fumes. Furniture made from whole wood is a better choice than that constructed from plywood or particleboard, both of which give off fumes from chemicals such as formaldehyde that are used in manufacturing. The same goes for carpeting. Natural carpet, such as sisal, cotton or wool, is preferable to synthetic carpet; synthetic carpet “off-gases” the chemicals used in manufacturing. That’s where that new-carpet smell comes from.  Cost Savings Living green is healthier for your pocketbook, too. The savings from an energy-efficient home add up fast, mostly in lower utility bills. How much lower? A builder in California sells homes equipped with solar panels, additional insulation and other energy-saving features that boast utility bills 60 percent less than conventional homes. While the homes cost more, the higher monthly mortgage payment is more than offset by the energy savings. If you’re not ready to install solar panels, consider giving your ducts a checkup. The typical house loses 15 percent to 20 percent of its heat or air-conditioning leakage from ducts alone. Make sure they’re well sealed and insulated, and watch your energy bill go down. More good news: The government wants to reward energy savings as well, so there are a number of local and federal tax-credit programs that offer incentives to homeowners who install energy-saving features, such as insulation or energy-efficient windows. Greater Resale Value Having an environmentally friendly home also pays off when it comes time to sell. According to a survey by the Shelton Group, 78 percent of consumers say they would choose one home over another based on its energy efficiency, and the majority would pay more for energy-saving features. Another study by a Colorado builder showed that similar-sized green homes sold at a $20,000 premium over non-green homes—great news for sellers. The good news for buyers: After the utility bills were included, the green homes cost less per month. One more sign that green is hot is the increasing number of buyers who are taking advantage of an Energy Efficient Mortgage (EEM). These “green” mortgages benefit the borrower in several ways. First, the estimated energy savings are added to the buyer’s income, allowing them to qualify for a larger mortgage amount. Second, the EEM allows borrowers to roll the costs of energy improvements into the total mortgage amount, allowing the upgrades to be paid for over the life of the mortgage.		Green your home today Here are some low-cost, high-yield things you can do right now to leave a lighter footprint on the environment. 1 Switch to compact fluorescent light bulbs. The CFLs of yester-year used to be big, hard to find and spendy. Now you can get them at nearly any store that stocks light bulbs. They’re a bit more expensive than traditional incandescent bulbs, but they last 10 times as long and use much less power. Need a little extra nudge to make the switch? How’s this: According to the Environmental Protection Agency, if every American swapped out just one incandescent bulb for a CFL, we’d save enough energy to light 2.5 million homes for a whole year. 2 Unplug electronics and appliances. TVs, computers, audio systems and other electronics often have a “standby” mode that can use up to half the power they draw when turned on. Plug your entertainment equipment and other devices into a power strip. Just switch off the strip and you eliminate any standby draw, and also protect your equipment from possible power surges. Contrary to popular belief, turning a computer on and off is not harmful, and it has a huge energy-saving impact. According to an NPR report, U.S. companies alone waste more than $1 billion a year on electricity for computers that are left on when not in use. 3 Adjust your thermostat. Here’s where a small change on your part makes a big impact on the environment. As much as half of the energy used in your home goes to heating and cooling. By setting your thermostat just two degrees lower in the winter and two degrees higher in the summer, you’ll save about $100 a year in energy costs—and about one ton of greenhouse gases that won’t make their way into the environment. 4 Install water-saving products. Switch to low-flow faucets, showerheads and toilets, and you can reduce water use by 40 percent. 5 Clean your air-conditioning filter. Air conditioners with dirty filters have to work harder, which means using more energy. Depending on where you live, your air conditioner may need cleaning as much as once a week. The good news: A clean filter keeps out allergens and other irritants, and a clean-running unit can save you $150 a year on your energy bill. 6 Re-think your laundry. There are two ways to reduce the amount of energy used for washing clothes—use less water and use cooler water. About 90 percent of the energy used for washing clothes is for heating the water. Unless you’re dealing with oily stains, use warm or cold water. Switching your temperature setting from hot to warm can cut energy use in half. You’ll also save resources by washing and drying only full loads. 7 Use healthier home-improvement products. Many paints, stains and adhesives contain toxic chemicals called volatile organic compounds (VOCs). When you use the products, they release toxins into the air that affect the quality of the air in your home, sometimes causing headaches and nausea. For the healthiest choice, look for products that are low-to non-toxic or labeled “low VOC.” 8 Insulate your water heater. A water heater uses most of its energy keeping the temperature of the water in the tank warm. Most of this heat is lost through the walls of the tank. Wrap your water heater with insulation that has an “R” value between 7 and 11, and you reduce the heat lost by 40 percent or more.

Home improvements that make “cents”



gourmet kitchen! Spa bath! A new deck! The excitement of living in a newly remodeled home is wonderful, but wouldn’t it be even better if you knew that your improvements were also a wise investment? Knowing a little bit about the return on investment you can expect may not dictate the changes you ultimately decide to make, but it will let you go into the process with realistic expectations and, hopefully, let you enjoy your “new” home even more when the project is completed.

Will your investment pay off?

Americans love investing in their homes both for personal satisfaction and for financial return. In fact, home remodeling accounts for about 40% of all residential construction spending—over $230 billion in 2006. In addition to a higher return at resale, the right changes can make your house more appealing to live in, help to bring more potential buyers in the door and potentially reduce the number of days it’s on the market.

If a financial return is important to you, there are things you should think about before diving into a remodeling project.

• How long do you plan to stay in the house?
Like most investments, it can take time for that new equity to grow, so most renovations should be considered a long-term investment. If you’re not planning to stay in your home for at least three years, it’s best to restrict your investments to exterior/curb appeal enhancements and regular maintenance. Making sure that all major systems like plumbing and electrical are in good condition pre-inspection can help ensure a good sale price.

• Keeping up with the Joneses.
People shopping for homes in your neighborhood expect a certain standard, and if your home doesn’t make the grade, an upgrade may be in order just to stay competitive. For instance, if most of the homes have one-and-a-half baths or more and you have only one bath, adding an extra half bath will more than pay for itself. The same is true if most of the homes are 20 years old but have upgraded kitchens. On the other hand, a high-end kitchen remodel might be de rigueur in one neighborhood but a waste of money in another.

• Don’t overbuild.
The flip side of building up to standard is that overbuilding beyond the neighborhood standard can really work against you financially. If you expand your neighborhood-standard three-bedroom, one-and-a-half bath home to five bedrooms and three baths, you’re probably pricing yourself out of the market, as people with that kind of cash will likely shop in a different neighborhood.

• Know what’s hot in your region.
Some home improvements have broad appeal no matter where you live, but others seem to be in high demand in certain regions only. For instance, a kitchen or bath remodel, deck addition or basement remodel can bring big bucks in the West while on the East Coast, some of the hot improvements are those that save energy and add attic bedrooms.

• Check the pulse of the real estate market in your area.
When real estate prices are rising you’re more likely to gain an increase in your renovation investment. If the market is cool, however, it can be harder to get back those improvement expenses.

Other things that can affect the return on your investment

Kitchen and bath remodels consistently offer good returns because most buying decisions are based on emotions. When homebuyers walk into a nicely redone kitchen or bath, or grand new master suite, they enjoy the thought of spending time there and the knowledge that they won’t have to invest time and money remodeling it themselves. Some other improvements such as a new roof just aren’t perceived as “sexy.”
Home Pricing Guide
When planning your remodeling project, be sure you’re maintaining the integrity of your home’s original design. Nothing turns off a buyer more than an add-on that looks like an afterthought, so try to stick with either the same materials or complementary ones. Also keep in mind that a lifestyle project such as a pool, sauna or wine cellar may be meaningful to you, but won’t necessarily appeal to other buyers or add up to additional dollars at resale.

Planned well, home renovations can add enjoyment for you and increase your home’s value in the future.



TIPS
The best minor remodels
Interestingly, less is sometimes more when it comes to remodeling. Because they’re less expensive, minor bath or kitchen upgrades generally yield a better ROI than major renovations.

• Adding a deck: “Livable space” has come to include the great outdoors, and adding a deck (particularly in the West) has become a popular home improvement. According to the National Association of Home Builders in 2007, 31% of home builders reported an increase in outdoor remodeling work compared to the previous year, and the most common type of outdoor remodeling job was adding a deck.

• In the kitchen: Adding functionality with dual sinks and cooking stations is worthwhile. So are cosmetic improvements like marble or granite countertops and ceramic tile backsplashes. Even if all you do is replace the appliances with stainless steel ones, you’ll make a positive impression on potential homebuyers.


Revamping space for a growing family

When a Seattle couple purchased their home it was plenty large enough, even with just a partially finished daylight basement. But five years later with a baby on the way, they decided it was time to make better use of the unused space by remodeling the basement rather than adding on.

“When we moved in, the basement just had some dated knobby pine paneling and partial walls, and we just used it for storage and a workshop. Our goals for the remodel were to
create a space that was warm, light and inviting for kids to hang out in and to make better use of a space that felt piecemeal and unplanned.”

The couple hired a contractor and then brought in a designer to help them take a fresh look at the layout, a decision they believe was a good one. In addition to laying out rooms to accommodate a new office, they say the designer’s help in choosing materials and pre-shopping saved a lot of time the busy couple couldn’t spare.

In all, the remodel took 10 months and went about 20% over budget—
a fairly typical overrun. The four bedroom, one-and-three-quarter bath home had already doubled in value over the prior five years and the couple plans to stay in the home for at least another five, so they’re confident they’ll recoup much of their investment when they do decide to sell. “And besides,” they say, “now our home is more functional and
I believe more marketable thanks to these improvements."