Courtesy Flickr user Denisp12 via Creative Commons license.
The high-performance home market is booming, with green homes currently accounting for 23 percent of the U.S. market. So why do some builders still report that home buyers will not pay more for high-performance home features?
John Barrows, owner of P3 Builder Group and partner at Performance Path Solutions in Wainscott, N.Y., believes that there’s a disconnect between what builders and remodelers are selling and what home buyers want—and that remedying that disconnect with stronger messaging could lead to more high-performance home sales. In “The Performance Market: Getting to Sold,” a session at the International Builder Show in Las Vegas earlier this month, Barrows offered up the following four “do’s” for increasing sales of high-performance homes.
- Do: Get your high-performance homes certified. An independent, third-party certification not only validates that you have built what you said you will build, but it also helps to define performance by clarifying what “green” means, Barrows said. These certifications can also add value to your home, he added, noting that as programs such as Energy Star, the National Green Building Standard, LEED, or the Department of Energy’s Challenge Home become more popular and gain brand recognition, this public acceptance attaches a sense of value to the accreditations. “There’s a growing awareness that high-performance features add value to a home,” Barrows said, noting the NAHB’s 2013 “What Buyers Want” study that found 89 percent of homebuyers surveyed would prefer and energy-efficient house over a comparable house without energy efficiency features, even if the high-performance home costs 2 to 3 percent more.
- Do: Sell them what they want, not what you know. Builders have done a good job educating themselves in building science and energy efficiency, Barrows said, but that’s not what clients necessarily look for. “You may have the best building envelope in the marketplace or be incorporating PV or geothermal, but if you don’t hit what customers want, you won’t get the sale.” If they’re focus is on health, they won’t necessarily see how a tighter building envelope factors into that. Barrows says that design, amenities, low maintenance, lower operating costs, and quality drive purchases. “The secret,” he said, “becomes taking what you know and putting it in terms that the consumer will understand,” which means that a builder must know what shade of green each customer is. “If you talk to a light green person from a deep green context, you get a disconnect,” he explained. To gauge a buyer’s interest in sustainability, “Listen twice as much as you speak. Do they value energy efficiency or indoor air quality or water efficiency? Are they environmentally conscious? Don’t start telling them what you can do until you have a firm idea of what they want.”
- Do: Help the buyer add value to your homes. When you learn a buyer’s concerns and match your message to meet their top priority, be it comfort, health, energy efficiency, or general environmental concerns, you help them add value to your product, Barrows said. “When you buy a car, you have a range of value. If we didn’t [have this], all cars would be the same price. They all have a steering wheel, four wheels. But something separates them,” he explained to attendees. “Our challenge in selling performance homes is to do the same thing that allows BMW to be chosen over Chevrolet.” Creating value involves telling the buyer not only what you have to offer, but also telling them why they need it, Barrow says.
- Do: Be careful of what you say and promise to a buyer. A sale is great, but be cautious about overpromising, Barrows cautioned. Be careful not to promise specific operational savings, return on investment, or guarantees for performance. Avoid overstatements. After all, performance can be greatly affected by home owner behavior. What builders can do, however, is promise that their home was built to a rigorous set of standards, Barrows said. You must then be prepared to define and explain what those standards are.