Real estate agents often field these questions from prospective buyers: “What school district is the house in?” “Are there any parks or shopping areas within walking distance?” “What is the neighborhood like?”
And, more-and-more frequently, “What are the home’s monthly energy bills?” First-time homebuyers and retirees on fixed budgets may be especially keen to know the answer to that question. When purchasing a home, everyone budgets for the mortgage payment, but not everyone factors in extra cash to cover a month of bad weather that translates into a high electric or gas bill. Operational costs of the home are higher than an insurance payment, and they’re definitely not fixed.
However, the seller’s utility bills aren’t always the best indicator of your monthly costs. Sure, better to have that information than not, but do keep in mind that -- as is true with cars -- “your mileage may vary.” A low bill from last February might reflect a mild winter, while a high September bill might be the result of a crushing heat wave in August. Consistently low bills could mean the house is energy efficient or that the seller kept the thermostat at a not-so-comfortable setting. Conversely, persistent high bills might mean the home needs an upgrade or that the owner worked from home, had small children, or was elderly.
For better or worse, you’re not guaranteed to have the same bills as the previous owners just as you’re not guaranteed to have the same weather.
That’s why knowing something about the home’s energy assets is so valuable.
Most home inspectors can tell you how old the equipment and appliances are, and they also know something about current residential energy code. They may or may not know much about how energy efficient the home is. For example, the home has a heat pump, and it’s four years old - is it efficient? Who knows?
Think about all you could learn and plan for if, instead of looking at old utility bills, you could request a full report of the home’s energy features. You’d know whether the home has the right type and amount of insulation, how comfortable the home is likely to be, and if there are any indoor air quality issues to be aware of. If you’re interested, Pearl Certification provides a service to help buyers understand a home’s energy asset features.
Greg Slater of Charlottesville’s Nest Realty Group says this has been his experience over the years, “Utility bills are just a short-term indicator of consumption in a long-term home ownership conversation. Understanding why the utility bills are what they are should be very important to the future owner.”
So, Future Owners (Buyers): when you’ve zeroed in on a handful of home prospects based on your search criteria, don’t forget to think through this question on how operational costs factor into your monthly budget. And if you want help in that conversation, of course speak with your realtor, but also check out local resources for assistance – nonprofits like the Local Energy Alliance Program are great sources of advice!