Green Industry Articles

Green MLSs Gaining Momentum

Rising energy prices, consumers feeling pinched at the gas pump, and an aging, inefficient housing stock all create a compelling case for making sustainable housing choices a priority.

Federal, state, and local governments have taken notice of the cultural shift toward sustainability and have spread around incentives to improve buildings' efficiency and diminish the country's dependence on non-renewable energy sources.

Growing demand

Given such business and lifestyle shifts, you're likely seeing efforts to green the Multiple Listing Services. Or maybe you're the one spearheading the local effort.

It's a smart business decision.

Green homes, after all, represent a growing part of the market, and the Green REsource Council (GRC) anticipates demand for such properties to grow.

There's also evidence that properties with green features or certifications sell more quickly and closer to asking prices than conventional homes.

In Portland, for instance, 14 percent of homes on the market between mid-2007 to mid- 2008 were green. By mid-2010, that figure grew to 23 percent. And between mid-2008 and mid-2009, Portland's green properties sold 18 days faster than their non-green competitors. In Atlanta, certified green homes sold 15 days faster than traditionally built new homes during 2010. In
2009, this number was 31 days.

A way to ensure that the industry is prepared for this greater demand is by making it simpler to find, promote, and evaluate green homes.

A green MLS does just that.

Roadmap to a green MLS

It's probably why the effort to green MLSs around the country is gaining steam.

A GRC and NeighborWorks survey of MLS operators conducted in late 2010 indicates that 13 percent of respondents (seventy-three percent of all MLSs participated in the survey) have some level of searchable green fields in the MLS system. Eleven percent are at some point of implementation.

It's not just green hotspots, like Portland, or in major cities where MLSs are getting greener. MLSs in places like Goshen, Ind., Fairbanks, Ala., and Peoria, Ill. also see value in greening projects. Check out the variety of case studies from areas around the country at the Green MLS Toolkit web site.

If you're involved in greening your MLS, you can use the survey, the Green MLS Toolkit, and insight from those who have greened their MLS to streamline your own process and overcome obstacles.

They also shed light on three vital components--regular communication of upcoming changes to all stakeholders, offering green education to your agent members, and having a process in place to ensure green claims in listings are accurate.

Wide benefits

A green MLS offers benefits to numerous constituents.

- Homeowners can get credit for green features they've added. And consumers seeking green features or certifications can find such properties.
- Appraisers gain a well of data to tap for apples-to-apples comparisons and to better value green features and generate legitimate comparables.
- Green data can be aggregated to show market trends, such as time on the market, and sale to list price ratios for green homes versus conventionally built ones.
- Green practitioners can use their green expertise for branding and marketing, and to establish themselves as the local go-to green practitioner.

The long-term result could be a dynamic tool that not only caters to consumer and industry demands, but also something that contributes to heightening the energy efficiency of the aging, inefficient U.S. housing stock.

"Data generated from early adopter green MLSs show buyers have a preference toward certified green homes. When we see more of this data from MLSs across the country, it will further justify the advantages of certified green homes and act as a demand catalyst," comments Al Medina, GREEN, LEED AP, NAR's Green Designation director.

Gearing up, rolling out

Proposing, planning, and implementing a green MLS is likely less time-consuming than you'd guess.

Thirty-five percent of those surveyed say it required one to four months. Only one percent of GRC survey respondents said it took more than 12 months.

Mitigating Risk and Greenwashing

Some of that time should be dedicated to ensuring data integrity, one of the most essential pieces of a successful green MLS.

"Green fields that aren't backed up with some kind of certificate carry the risk of greenwashing or errors," points out Laura Reedy Stukel, GREEN, EcoBroker®, Consultant for Center for Neighborhood Technology/Energy, and a practitioner with L.W. Reedy Real Estate, Elmhurst, Ill., who was involved with greening Chicago's MLS.

It's critical for MLS boards to create policies that combat greenwashing. There are a couple effective approaches.

The Traverse Area Association of REALTORS®, Traverse City, Mich., for instance, reviews each listing to ensure that green washing isn't taking place. And the Phoenix MLS requires practitioners to upload green certification documentation within four days of placing a listing. Without such proof, listings are deactivated. Other MLS systems are following the example set
by Traverse City and Phoenix because these policies mitigate risk, greenwashing and ensure good data.

Deep green smarts

Closely linked with ensuring data integrity is member education. After all, most greenwashing, say experts, is unintentional. Some non-green practitioners, for instance, may check off that a house has the ENERGY STAR® qualification, even if a house only has an Energy Star dishwasher.

Whether it's intentional or not, erroneous green information taints the data and compromises the legitimacy of all green properties in the MLS.

And while it's beneficial for practitioners to have the technical know-how to maneuver a green MLS, the most effective training, believes Medina, is a green certification program, like NAR's Green Designation.

NAR's Green Designation provides a deep green education and it can be used to generate more business. Medina comments, "If agents are committing themselves to sitting in a class to gain CE credits, why not invest more hours and gain a new designation and deeper knowledge?"

The right team

Forming a planning team that incorporates input from all stakeholders--builders, developers, contractors, and members of local NAHB and USGBC chapters-- strengthens the end product.

Anna Altic, an NAR Green Designee, EcoBroker®, and practitioner with Village Real Estate Services, Nashville, Tenn., who spearheaded the greening of her local MLS, points out that such people best understand how green materials really perform in the field. They also have in-depth knowledge of certifications and they're direct beneficiaries of a strong green MLS.

Tailored fields

Choosing the level of adoption, the number, and type of green fields needs to be tailored to local needs.

Given that there are few or no LEED-certified properties in her market, Tracy Huotari, CEO of the Duluth Area Association of REALTORS®, Duluth, Minn., for example, intends to focus on practical items, such as energy efficient windows, when its MLS committee starts looking at greening the system later this year.

And, says Julie Alert, association executive of the Elkhart County Board of REALTORS® (ECBOR), Goshen, Ind., "We picked things that made sense for us-- windows and doors, green certifications, and energy-efficient appliances--and that would give us the most bang."

Including fields that give homeowners credit in the MLS for green upgrades they've done is key.

"Lots of people made green improvements and are getting nothing back on it," comments Stukel.

Appraisal tools

Throughout the planning and implementation phases, Stukel suggests ensuring that the green MLS will serve as an appraisal tool.

Appraisers need to be confident that they're seeing legitimate green features and they have to be able to clearly differentiate between green and non-green properties.

After all, if they don't have comps for something, then they can't put a value on it. And both appraisers and lenders need to see value before they'll factor green features into their decision making.

The Green MLS Tool Kit and beyond

Given that green standards and certifications will evolve, many view the MLSs as works in progress. Thus, MLSs should be reviewed annually to be sure they remain dynamic and reflect current thinking and technology.

That ongoing tweaking is likely to lead to a green MLS that evolves into a tool that has greater value to the real estate industry and to consumers. Altic believes people are starting to understand that green homes offer true value, not just hype.

Lauren Hansen Emery, CEO of IRES, Northern Colorado MLS based in Loveland, CO, agrees and says, "If one house has a HERS rating and the one next door doesn't, eventually that will pan out in the numbers."

Source: Green REsource Council Newsletter, March 2011