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Is sustainability in the Real Estate Industry a paradox

11 November 2013

Sustainability in Real EstateWe have all been there. You’re trying to rent or buy a house, you talk to the real estate agent about the features of the house and you ask some (apparently) unfathomably difficult questions. "Does it have any north facing windows?”, "What sort of water heater does it have?”, "Is it insulated?” "Does it have a water tank?” "Does it have solar panels?”
 
It is at this point that most agents stare at you blankly as if you have just spoken to them in Swahili, pretend their phone is ringing, rush off and never speak to you again. Ever.
 
A few short years ago, this was not a common conversation that real estate agents were having   (unless you had an interest in solar, sustainability, energy efficiency or were from Byron Bay). But     according to new research, times have changed dramatically and the biggest concern of renters and buyers is how to reduce energy costs.
 
Today, they ask all these questions.Regularly.
 
Based on a lot of research and a fair chunk of investment, one of Australia’s largest Real Estate agents (LJ Hooker) has set about to break the paradox of "sustainability aware real estate agents” and yesterday I attended the launch of their program designed to address this; aptly named "Liveability”.
 
LJ Hooker have around 800 franchised outlets around the country and sell around 40,000 homes each year, so they have quite a reach and potentially, a quite astounding potential to influence, educate and support the growing mass of customers looking for answers on sustainability. They described this ability as "their big fat moment”; the chance to interpret what the potential of a home’s feature’s represent and realize a better deal for sellers, renters and buyers. The classic win-win.
 
During their industry briefing, we heard how they distilled sustainability into the context of customers as four core, interrelated issues; health, efficiency, comfort and community. These sum up nicely to "Liveability”, hence their name. According to recent research, 53% of consumers asked real estate agents for help on Liveability issues and very few got the answers they were seeking; they know they should ask the questions but often don’t know how or exactly what to ask. A dramatically increasing number of consumers literally ask to see copies of the power bills on homes they are considering. Property market values and increasingly being impacted not only by the bricks and mortar, but also by the running costs of the home, and it’s broader Liveability.
 
Having worked on the deployment of PV and other sustainability features on numerous real estate projects over the decades, I know how big this challenge is but I have to hand it to LJ Hooker; I really like what they have done and their approach to the solution; this could be a game changing precedent. Critically, its one of the first programs that I have heard of that offers support for existing (rather than new) housing stock, includes renters, covers a wide range of issues and is market based. It simultaneously arms, consumers, buyers, sellers and agents. LJ Hooker noted that they looked around the world for similar programs – and found almost nothing.
 
In simple terms they have two key elements to their program strategy.
 
The first is a standardized way to asses and describe these features. They call them "the 17 Things” and its a pretty decent list that will allow results and features to be efficiently and readily described and compared. Their Liveability Features logo will feature on listed homes that have been assessed and they will review the checklist of features and inclusions every 6 months, ensuring it stays relevant.
 
The second is a swag of research, expert advice, industry endorsements and crucially; training for their agents. I had a chat with one of their Liveability Real Estate Specialists and it was quite telling. Obviously, he saw it as a chance to differentiate from his competitors, but he was genuinely quite blown away with everything he had learned; it was like someone had kicked down the door to sustainability for him and flicked the LED light globe on. He saw it as an obvious growth area and it made his life easier; he could finally answer all those quirky questions and they were no longer coming from chicks with dreadlocks. Mrs Jones now expected him to answer these questions and he was brimming with confidence and enthusiasm.
 
What I particularly liked was that to hold onto his real estate licence he had to undergo re-training each year and attain a certain number of points and rather than "sitting through boring courses on laws and regulations that I already know inside out, I can now learn something fascinating, interesting and that adds value for me and my clients ". That should ensure the agents also stay up to speed and just might be the start of a paradigm shift.
 
They have a very detailed and nicely constructed web site, have developed a nice app that helps you track sun paths and have embraced social media through a variety of channels. It’s early days for this program but the potential exists for this to become the new-normal, to drive market based competition for such assessments and to really embody the value of Liveability in home values and rental returns.
 
Gold star LJ Hooker.
 
This article was written and sourced from:
Nigel Morris 
Solar Business Services

(nb from Nigel ; I was not involved in anyway in the development of this program nor are LJ Hooker a client, nor did they ask me to write this story, although I have been watching from the sidelines for some time. I just think it’s cool.)

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