by Rochelle Barcelona. MIRM
Article contribution to Sales and Marketing Ideas May/June 2008
With the challenging real estate market in many areas of the country, builders are looking for whatever can set them apart and give them an edge with buyers. If you haven't considered building green before, now is the time to color your world green. It can help you make a sale now and it will prepare you for the green mandates and regulations that are certain to be coming to your market soon.
NAHB projects that up to 10 percent of all new homes will be built green by 2010. A survey by NAHB members by McGraw-Hill Construction that green building, which accounted for $2 billion in 2005, will increase to 60 billion during the same time period. Make a commitment to go green now will help position your company to ensure you are offering what homebuyers are going to be asking for more and more in the future. Many industry experts, in fact, believe Unit building green will soon become "the cost of doing business" in the new homes market.
Now more than ever, Americans are aware of our environment. There seems to be a “critical mass" of green thinking growing, not only in Hollywood with actors driving their Prius Hybrids to the Oscars, but in mainstream America as well. According to McGraw-Hill's ' 2007 – “The Green Homeowner" Smart-Market Report, “two-thirds of home buyers are aware of green building”.
How Green is Your Buyer?
You don't need to market to the green buyer, just market to the new home buyer. Once they see the benefits of' a green home, the choice is simple. And all indications are that green buyers are green buyers for life. They tend to become raving fans and vow to buy green the next time they are in the market for a new home. In fact, research shows that 85 percent or green homeowners will recommend a green home. The number one way a prospective buyer learns about a green home is by word of mouth, so current green homeowner's are your best and least expensive marketing tool. Jim Bayless, president of Northern California-based Treasure Homes in Folsom discovered just that during the first homeowner's meeting at his Fallen Leaf at Riverbend, a zero energy community* in Sacramento, Calif . “it was more like a revival celebration than a meeting.
a revival celebration than a meeting. Everyone was excitedly comparing their savings and couldn’t stop talking about how much they love living in the community. I am confident that each of these homeowners will seek out another energy efficient solar community if they need to relocate."
Robert Charles Lesser & Company (RCLCO), a leading independent knowledge and solutions firm serving the real estate industry, has identified three major buyer profiles - that they define as shades of green - that are most likely to purchase a green home.* These are:
GREENBACK GREENS: This group is most interested in saving energy and realizing lower utility bills.
HEALTHY GREENS: This group is most interested in the real or perceived health benefits associated with improved indoor air quality, exceptionally "tight" construction, and design that encourages natural ventilation and ample sunlight.
FOREST GREENS: Of all green groups, the Forest Greens are the least defined by clear demographic divisions, but instead by a motivation or belief that helping the environment is not only their responsibility, but that they can make a difference.
Selling the Benefits
William H. Kreager, principal of Mithun architects + designers + planners in Seattle, Washington, knows green from the inside out. His firm boasts 160 designers who work on sustainable projects. "A green in M in is the combination of so many elements. Being able to clearly tell the buyer the end benefit to them is what makes it marketable," says Kreager,
Kreager has found that the trifecta of primary benefits builders market to their buyers includes a healthy home, savings due to the energy efficiency, and lower maintenance costs. Solidifying Kreager's real world experience, RCLO's consumer research shows 36.4 percent of potential home buyers currently identify home or community features specific to health benefits, energy savings, and the environment as their primary decision-making factor in their next home purchase.
Over one-third of all American home buyers- not specifically green buyers - identify one or more of these motivations as the most important decision-making criteria in buying their next home. See below.
REALIZE HEALTH BENEFITS; A new home occupant can hope to attain real, or perceived, health benefits due to lower toxicity building materials and/or health-promoting design features.
SAVE ENERGY: A new home can fulfill a desire to save energy and realize lower utility bills.
PROTECT THE ENVIRONMENT: A home purchase can enhance the sentiments of environmental responsibility.
Selling the Commitment
McStain Neighborhoods president and CEO Eric Wittenberg is well aware of the potential difficulties in marketing green homes. And he should know. Louisville, Colorado-based McStain has been recognized regionally and nationally for its environmentally responsible community design and building practices for more than 40 years. "We've been reducing the size of our carbon (not print since before we knew what that was," says Wittenberg.
Amy Levi, partner and creative director of Strada Advertising, McStain's agency of record, says their point of differentiation is the level to which McStain takes green building. "Theirs is a much higher level than just touting the benefits of owning a green home." notes Levi. "Sustainability is an intrinsic part of McStain's values. The company has a sincerity of mission, a message of optimism and hope for the future that resonates with buyers, especially in this market."
Green isn't Just for the Chosen Few
Clark Wilson began a roofing business when he was 17 years old and grew into one of the most respected home builders in Austin, Texas. He had always had a personal interest in living green, and last June established Green Builders, Inc.. development and home building company that is traded on the American Stock Exchange. Wilson believes his company is the first large-scale developer and production home builder to make the green commitment. His homes range from first-time homes starting in the $200,000s to executive-level homes in the $700,000’s.
With Green Builders. Wilson is making sustain-able living available to virtually everyone, "Green living is no longer for a select few - we simply can't afford for it to be. Our idea is to build homes that are efficient, comfortable, healthy, and attractive all at the same lime, and ihat offer people-friendly and earth-friendly features and options. All of these things make; a home last longer and appreciate fast. Nothing is greener than that."
Green Builders currently has three master plans under development, and its first furnished model homes will be completed in March. The company is building its new homes to the NAHB National Green Building Standard and touts its four-fold, common sense approach to green building under the proprietary moniker of the GreenSense™ Program which includes: Energy-Sense™ for cooling and lighting, WaterSense™ for water conservation, EarthSense™ for its building materials, and HealthSense™ for its indoor air quality. It recently did a small advertising campaign to invite prospective buyers to view an eco-friendly model home and had 200 people attend. "We have quite an interest list started for all of our communities. There really is pent-up demand for sustainable living options out there with the general home buying population," notes Wilson.
Barriers to Buying Green
But the road to building and buying green isn’t paved with rose-colored stones. There are definitely some roadblocks along the way. The primary factor that limits builders in building green or taking itto the level of including solar in their green is lack of Federal, state and utility-based incentives and/or rebates.
Green Builders, for example, is building their homes "solar ready," but not including solar as a standard feature in their homes. "When you consider the fact that a solar system ran add $25,000 to the price of our homes, and our homes start in the $200,000s, we are talking 10 percent of the price of the home for solar power." Wilson comments. "Until (the state of)Texas and the utilities in communities] where we are building offer incentives, we can't add that amount to the cost basis of our homes. It just won't fly."
Some states, though, are ahead of the curve when it comes to energy efficiency and solar incentive and rebate programs. The state of California's Energy Commission, for example, has established the New Solar Homes Partnership designed specifically it encourage builders to build energy-efficient homes with integrated roof tile solar panels as standard. The financial benefit to the builder increases with the level of energy efficiency. The partnership also has a strong consumer awareness campaign to educate potential homeowners on the benefits of energy efficient solar homes.
According to the McGraw-Hill report, green home buyers find awareness and education to be the most important obstacles to overcome in the green home building market. However, costs and lack of available green homes are close seconds, and are first and second respectively when looking at overall obstacles to purchase. Comparably, builders perceived higher cost as the most significant obstacle to building green homes.
So McStain neighborhoods keeps their green information fun and friendly, as evidenced by its website at www.mcstain.com, “we believe our greatest mission is to turn a buyer of a traditional home to a green home,” says Whittenberg. “it can change not only their life, but our world.”