Earlier this week I attended a seminar regarding City of Austin ORDINANCE NO. 20081106-047, better known as Austin's new Energy Audit Ordinance and wanted to share some of the information I learned with you. The Energy Audit ordinance was signed into compliance in November 2008 and by June 1, 2009, will require "all residential properties within the city limits, 10 years or older, who receive services from the Austin Electric Utility and that are on the market for sale to have an energy audit completed by a certified auditor prior to the property being sold and closed", according to the Texas Green Energy Audits website. The purpose of the new ordinance? The city wants to encourage Austin homeowners to voluntarily participate in energy efficiency programs through Austin Energy. “The goals of this program are to lower energy consumption by driving the market towards demanding higher standards of home energy efficiency. Reduced demand for electricity will benefit us all in the following ways; lower monthly bills; lower taxes because the City will not have to construct additional power plants and better air quality due to reduced CO2 emissions” says Susan Marler, founder of Energy Action.
It is important to note that there is still a lot of work going on behind the scenes up until June 1, 2009. A whole lot. Without getting too technical and boring you all to tears, the biggest challenge seems to be that currently, there are roughly 11,000 homes for sale listed on the MLS, not to mention the 388,000 customers Austin Energy services. Granted, the latter figure does not comprise single homes entirely but also includes commercial buildings and multi-family dwellings such as apartment complexes and condos. Consider that there are just a fraction of those numbers of inspectors who belong to the Texas Association of Real Estate Inspectors (TARI), guess how many of them are actually BPI certified to audit this new energy compliance? Exactly.
So what did I take away from the seminar? Well - just generalize with me for a minute here - it seems this whole "change" thing always seems to get people up in arms. From what I gather, there has been a considerable amount of dialogue on this topic amongst the Austin Real Estate Salesperson and Austin Real Estate Inspector communities. No matter how you roll the dice, change just freaks some people out. There are people who learn about the change, accept it and embrace it. On the other hand, others are always going to see the glass as half empty no matter how much tea and organic Sugar in the Raw you put inside of it.
So what does this mean to you? According to Krisstina Wise from The Good Life Team, "for Sellers: This means that the cost of selling Austin homes after June 1st, 2009 will increase. You may also have a harder time selling your home if your energy audit report is unsatisfactory to prospective Buyers. The good news is that you will have a greater understanding of your home’s level of energy efficiency and you’ll be participating in a collective effort to lower Austin’s energy usage, create green jobs, and take better care of our environment.
Buyers: This means that after June 1st, 2009 the seller(s) of a non-exempt property within the city of Austin will be required to complete a mandatory energy audit and disclose the findings of that report to you prior to closing. This will offer you a better understanding of the home’s energy efficiency so that you can make a more informed buying decision.
Next steps?
Take action now before your home gets audited and improve your home’s energy efficiency for better audit results. For example, air seal and insulate your home, improve your heating and cooling efficiency, and when replacing appliances choose energy star appliances.
Participate in one of Austin Energy’s designated utility programs and you may be exempt from the mandatory audit.
Contact Energy Action today for more information or to schedule your energy audit online. They give 25% of their annual profits to local charities."
Honestly, I think a lot of the controversy regarding this energy ordinance has to do with the fact that few facts and details are known. How often will the sophisticated equipment need to be calibrated in order to remain accurate? What happens when a house is scheduled to close on a Thursday and a certified energy auditor is not available until the following Wednesday? (Keep in mind, too, that this energy audit is completely separate from a regular house inspection.) Will every single unit in a condo or an apartment be required to undergo an audit or will just a sample of a few units be sufficient? And most importantly, how will the findings of the audit influence what upgrades the Buyers will want or expect to be covered by the Seller before they sign the sales contract? The repairs are going to be called ‘upgrades’ or something similar with the idea being the value that will be gained once the upgrade is performed. There is still a lot to learn and as new information is released I feel it will alleviate a lot of worries and concern.
Being a Libra and therefore very diplomatic, I see both sides of the argument as to why this is and is not a good idea. First, there is the concern over “Who are they to tell me what I can and can’t do with MY property?” Then there is the concern of, “What? I’m required to do yet another thing before I can sell my house? Are you kidding me?” I get it.
However, all of this hoopla boils down to these main two things. First and foremost, 30% of our (and your) energy bill goes to heat and cool the attic unless you've done something to improve it, this is huge cause for concern in my opinion. Early on I learned from my Science/Gym Teacher that energy cannot be created nor destroyed. I’m not best buds with Mr. Bernacke, but I do know according to the law of supply and demand, the scarcer something is, the more expensive it becomes. All of the energy in Austin which is currently being wasted due to improper insulation and outdated systems creates a surplus of energy and since it cannot be recreated or mass-produced to bring the cost down, it is eventually going to cost everyone a lot more money unless we take steps now to fix this problem.
Depending on how you look it, yes – an energy audit is an additional expense (expected to cost somewhere in the range of $200-$400 depending on the size of the house) and an extra step (which typically takes about 1 hour per square foot) a seller needs to take before selling their home. Just as with a Seller's Disclosure Notice which is required of the seller to complete regarding the condition of their home, the energy audit report will simply be a disclosure summary for how efficient or inefficient a home is before the contract is executed - and the sale will not close unless the title company has a record of the audit. Contrary to popular belief, the home does not have to receive a 'Pass' or meet a minimum score in order to be sold. In addition, the 'upgrades' do not even have to be completed in order for the house to be sold; audit simply needs to be performed. At this time I do not know how long the upgrades need to be completed after having the audit performed.
Stay tuned, I’ll post more new information in the near future.
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