Integrating Energy Efficiency in the Multiple Listing Service (MLS)

The MLS system is the primary source of information on real estate available for purchase, and is not a single entity, but rather a series of more than 800 electronic databases maintained by local and regional associations of Realtors. [1] Each database collects and displays listings submitted by certified real estate brokers, enabling subscribing Realtors to view each others' listings and assist their clients -- both buyers and sellers -- in accessing a wide pool of options. In many cases the public can view a portion of the information available for each property, although viewing the full listing requires a subscription. In some communities, forms for MLS listings have been expanded to include fields on energy-efficient features and green certifications. These new search options enable Realtors to easily identify homes that might appeal to energy-conscious buyers, and to market energy-efficient properties that

Photo courtesy of the Board of Trustees of the University of Illinois, (c) 2001

they represent as such. In addition, including energy efficiency as a standard feature in the MLS helps to bolster the standing of energy efficiency as a mainstream market value, rather than a niche interest.

According to some industry representatives, the ability to search for green properties in the MLS may also help to establish market valuations for energy-efficient features, as Realtors and others can compare the asking-prices of otherwise similarly-equipped homes. [2] Initial studies show a positive link between home values and energy efficiency through the MLS listing. A study assessing the market performance of third-party certified "sustainable residential properties" (including Built Green, Earth Advantage®, ENERGY STAR®, and LEED for Homes) for sale in the Portland, OR and Seattle, WA regions found a positive correlation between home values and certification. Using MLS data, researchers found that on average, third-party certified homes for-sale during 2006-2007 sold for 9.6 percent and 4.2 percent more than non-certified homes in Seattle and Portland, respectively. In Portland, certified homes were on the market for 18 days fewer than conventional homes. [3] Click here to view the Green MLS Toolkit, developed by the National Association of Realtors, to learn more about implementing a green initiative for their Multiple Listing Service (MLS).

A better understanding of the value added by specific energy-saving measures may stimulate more property owners to undertake these improvements, and may also increase lenders' willingness to offer lending instruments that finance energy efficiency improvements on favorable terms. Some real estate professionals have joined EcoBroker, a membership organization that provides education and training on the value of energy-efficient homes and strategies for marketing them to consumers. To earn EcoBroker designation, members must complete a curriculum about home energy efficiency and environmentally sensitive design, which includes training on financing products such as energy-efficient mortgages and state or local tax credits available to homebuyers. EcoBrokers are also required to learn about funding mechanisms to assist with energy-efficient retrofits in existing homes. Click here to leave this site and learn more about EcoBrokers.

Greenwashing Lacking a single protocol to certify that homes meet a standard of energy efficiency, there is the risk that developers, owners, and property managers may market as energy-efficient homes that are not actually high-performing and have not received any verification to back up the claim -- a phenomenon sometimes known as "greenwashing." As more regions adopt fields for home energy performance into the RMLS, it is important to consider developing common protocols to ensure that homes described as energy-efficient meet a tested and approved set of standards.

Solutions in Action

In 2006, members of the Board of Directors of the Regional Multiple Listing Service (RMLS) agreed to add fields for home energy performance and green home certifications to the RMLS electronic database, which consolidates property listings in the Portland, Oregon metropolitan area. Unregistered visitors can see data on basic home attributes (number of bedrooms, square footage, year built, etc.) for each RMLS listing, plus additional optional information about special features, including whether the building had received one of more than ten "Green Certifications" and the year it was awarded. [4] Subscribers to the service may access additional details on other energy-efficient features, including the use of sustainable materials such as cork flooring and whether Energy Star-certified or other high-efficiency appliances have been installed. As of early March 2010, a search of the RMLS indicated that some 6,900 listings had received green certification. Based on the popularity of the new feature, the nonprofit organization Earth Advantage - which works with home builders and developers to reduce the energy consumption of new and existing homes - has started to offer the "Sustainability Training for Accredited Real Estate Professionals "(STAR) program. The two-day course arms Realtors with the information needed to describe green home and energy efficiency products and concepts to clients. Successful graduates receive marketing assistance through a personalized page on Earth Advantage's site and a funding award from the Energy Trust of Oregon's Trade Ally Program. Click here to learn more about the STAR program.

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Click on the links below to learn more about specific approaches to influence market values Marketing to owners The real estate industry can incorporate energy efficiency into the multiple listing service Marketing the benefits of energy efficiency Public marketing campaigns and rebate and incentive programs can stimulate investment and increase the demand for in energy-efficient homes

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You are currently reading: Influencing market values This section covers steps the public and private sectors can take to stimulate interest in energy-efficient homes and reward those who choose to undertake improvements Other pages in this section: Tools for promoting behavioral change The tools discussed in this section include technological innovations to help monitor energy use, as well as educational and training programs to inform tenants, homeowners and building managers on reducing energy costs

[1] What is a Multiple Listing Service (MLS)? National Association of Realtors.
[2] Local Homes Database Turns "Green". March 2, 2007. Real Estate Magazine.
[3] Certified Home Performance: Assessing the Market Impacts of Third Party Certification on Residential Properties. May 2009 [PDF]. By Ann Griffin. Portland, OR: Earth Advantage Institute.
[4] The "Green Certifications" in the Portland, Oregon RMLS could include Energy Star, LEED, Home Energy Rating System (HERS), National Green Building Standard, NAHB Model Green Home Building Guidelines, and Enterprise Green Communities. Click here to view the Green MLS Toolkit to learn more about implementing a green initiative for their Multiple Listing Service (MLS).