Around 2+ years ago I had posted a lot of questions around building our first house.  We wanted to build something as energy-efficient as possible within our budget.  We ended up with a very efficient house, & 2 years later I can say that our energy bills have met our expectations.

Some of the things we did that were beyond our builder's 'standard package'

wall insulation was flash & batt in the cavities, with 2" of xps outside
R60 in the attic
all ceiling penetrations (can lights, etc), top plates, etc. spray foamed
box sills foamed
97% efficiency modulating furnace
very low u-value windows on west/north/east sides
high solar gain windows on south side (lots of 'em)

Probably other stuff I'm forgetting, but you get the idea..

All in all, we went.....maybe 5% over the original budget to do these things.  But over time, they'd pay for themselves...


So here's the vent part...

3 weeks before we were ready to move in, we found out my wife was pregnant.  We were basically told we weren't going to be able to have kids, so when we budgeted for the house, we didn't factor that in.  Two years later, we decided that we want to sell the house & get into something a little cheaper.  We had several realtors come over to look at the house.  All of them said, "having all of this energy efficiency stuff is nice, but you're not going to get any more money for your house because of it.  People won't pay extra for that stuff.  If you had granite countertops, you would probably get a little more for it, though".

I think most people who are building a house  THINK  they're going to be there long enough to make the upgrades pay off.  Of course, things happen.  As much as I hate to say it, if we do build another house, I'm really going to have to think about how much to spend on these kinds of upgrades, in case we have some other unexpected situation. 

Thank you for posting your thoughts about the economics of building better.  This should be helpful to people that want to build.  It is something that should be considered before building. 

I would love to see homes built more energy efficient.  Cost is often the most important thing that discourages people from building better.  In the last few years I have begun to see more alternative building systems being introduced.  Hopefully, some of them will eventually have enough volume in sales to compete with conventional building.  Factory built systems using wood or concrete have already improved enough to be more energy efficient than site-built conventional.

Alton -

thanks for the response. Obviously economics is a big factor whether you stay in a home a long time or not - I think that's what so many of the topics on this forum are about. Obviously we coudl all spray foam our enitre house & have a tight, efficient house, but it would be so expensive that you'd never realize the savings. It's just sad that I was trying to take that into account & make smart decisions, yet will take it up the tailpipe when we sell.

I crunched a ton of numbers before we built this house (and since), & it seemed that there definitely is a point of diminishing returns. Analyzing our utility bills, a surprisingly high percentage of the bill comes from stuff that isn't really impacted by how efficient the house is - electricity for the refrigerator, nat gas for the dryer, all of the taxes & surcharges, etc. When you look at the actual usage charges, reducing usage 50% may only equate to a 15% difference on your bill. I posted something about this, with specifics from our bill, a year or so ago.

If we do build a house that's somewhat smaller (thinking about more like 1700 sq ft vs 2000 sq ft), I would imagine those decisions will be even harder to make. We'll cross that bridge when we get there. The REALLY difficult thing for me is that, in our area, it's much cheaper to buy an existing home (for the reasons I mentioned above) than to build - but I know that if we buy, it's not going to be nearly as efficient as something we'd build..

Posted By jerkylips on 05 Mar 2012 11:24 AM

So here's the vent part...

3 weeks before we were ready to move in, we found out my wife was pregnant.  We were basically told we weren't going to be able to have kids, so when we budgeted for the house, we didn't factor that in.  Two years later, we decided that we want to sell the house & get into something a little cheaper.  We had several realtors come over to look at the house.  All of them said, "having all of this energy efficiency stuff is nice, but you're not going to get any more money for your house because of it.  People won't pay extra for that stuff.  If you had granite countertops, you would probably get a little more for it, though".

I think most people who are building a house  THINK  they're going to be there long enough to make the upgrades pay off.  Of course, things happen.  As much as I hate to say it, if we do build another house, I'm really going to have to think about how much to spend on these kinds of upgrades, in case we have some other unexpected situation. 

I touched on this in another thread but what you are experiencing in regards to energy builds is very true. People don't buy houses because they have high insulation and great performing windows, people buy houses first on location, second cost, third size, fourth on interior finishes/layout. Energy comes in somewhere 8th or 10th.

That is the fact and reality of the "green building" and ROI. If you look at it as a "business decision", building green is a losing investment. One will not even break even in the first 5-10 years after the build, it can take 10-20 years to break even on all the energy upgrades if one tries to sell their home.

There is a reason WHY tract builder homes sell, they are cheap and easy to build and have all the things people want. Unfortunately energy conservation upgrades are not one of them. People are not willing to pay a premium for that, they will pay for more interior upgrades but not for insulation that is behind the wall that they will never see.

Posted By jerkylips on 05 Mar 2012 01:06 PM
Alton -

thanks for the response. Obviously economics is a big factor whether you stay in a home a long time or not - I think that's what so many of the topics on this forum are about. Obviously we coudl all spray foam our enitre house & have a tight, efficient house, but it would be so expensive that you'd never realize the savings. It's just sad that I was trying to take that into account & make smart decisions, yet will take it up the tailpipe when we sell.

I crunched a ton of numbers before we built this house (and since), & it seemed that there definitely is a point of diminishing returns. Analyzing our utility bills, a surprisingly high percentage of the bill comes from stuff that isn't really impacted by how efficient the house is - electricity for the refrigerator, nat gas for the dryer, all of the taxes & surcharges, etc. When you look at the actual usage charges, reducing usage 50% may only equate to a 15% difference on your bill. I posted something about this, with specifics from our bill, a year or so ago.

If we do build a house that's somewhat smaller (thinking about more like 1700 sq ft vs 2000 sq ft), I would imagine those decisions will be even harder to make. We'll cross that bridge when we get there. The REALLY difficult thing for me is that, in our area, it's much cheaper to buy an existing home (for the reasons I mentioned above) than to build - but I know that if we buy, it's not going to be nearly as efficient as something we'd build..

I spoke to a contractor 2 weeks ago who has been building for 30+ years. He said the same exact thing, when you pay for all of this energy efficiency you will have to wait 20+ years to break even. Diminishing returns are a part of the equation.

The same thing plays out in other "green" products. Just look at the car industry. Comparisons were done with a Prius (50MPG) vs. a gas powered vehicle that gets 35-40MPG, when they calculated the original cost of the vehicle, then the cost of fuel, the numbers showed it can take 20 - 30 years to break even on the higher costs of the Prius vs. the savings in fuel. GM announced today that the Volt will no longer be made until further notice due to low sales. If I can buy a car that gets 40MPG for $19K, why should I pay $27K for a Prius that gets 50MPG? It will take me 30+ years to break even on the added $8K cost of the Prius. At 12k miles a year, at $4 a gallon, that is only a difference $240 a year in fuel savings for the Prius.

The same goes for energy builds in homes. One will most likely NEVER see a ROI in their lifetime. One would have to live in the home for 20-30 years before they would even break even. This is a reality that a lot of green agenda manufacturers don't tell you. This is a reality that they don't like to talk about. Unfortunately people like you learn the real hard life lesson of the green homes. A life lesson that will hurt you in the pocketbook, in a moment in your life when you are starting a family and need money.

ROI can be very difficult to calculate. When we built, I looked that comparable solutions & what they would cost. I was coming up with 10 years or less for our project. Again, it's almost impossible to really calculate because fuel costs will vary over the next 10 years. You need to factor in the interest you're paying on a bigger mortgage if you're spending more, but interest rates are so low these days that it's not AS much of a factor.

I see your point in the Prius analogy, but I think there is a difference. Obviously a 20 year ROI on a car doesn't make sense because a car may not even last that long. If you really do stay in a house for a long time, you can get to a point where you realize the savings. In our case, I think 10 years is a reasonable number. If we had done (not trying to offend anyone here) PV/solar electric, that would push or break even point back many years, because it's pretty expensive (and because up here in WI we don't get as much/as hot sun as other areas).

I guess that was my point, we were TRYING to be smart about the choices we made, but because the public as a whole doesn't care about these things, we will be lucky to break even on the house..

First I have to congratulate you on the child front.

I haven't been on here as much lately, just getting time to get back in to things, but is your current house to small or have the wrong layout or ?

Anyway I totally agree on the ROI of all of this, very few people will pay for the unseen things. I think we were really lucky when we sold our last house and an engineer saw it and contacted me directly and had lots of questions. I think that is what sold the house, he was one of the few that actually appreciate the spray foaming and extra attention to energy details that went in to it. As a matter of fact he recently emailed me about adding solar panels and after a week or so of exchanges he said he was going to drop it because the ROI was to far out, which I kept telling him. Solar PV has to be done for another reason, not ROI, unless there is some crazy incentive or rebates or tax reasons that make it work, thus adjusting the ROI. I do it first as a hobby and secondly as a backup generator of sorts.

So are you going to sell, where is it located? My in-law's are looking to move in town.

Hey Brock, long time no talk! Thanks for the congrats! He was 1 in January & has been the best thing that happened to us.

Long story short, we're just trying to get into a lower house payment. Our house isn't huge (just under 2000 sq ft) but we did a fair amount of higher end things (painted woodwork, transoms, site-finished hardwood, lots of big windows, really nice porcelain tile, etc.). At the time it was a very comfortable payment, but (personal info coming...) now that we know we CAN have kids, we want to work on another one. Our budget with no kids vs. 2 kids is not exactly the same so we're trying to plan ahead for it.

As for the size & floorplan, we love it. If we do build again, we will most likely build a smaller version of the same house, & try to cut costs on the finishes, see if there are some things we can do down the road, etc.

I'm still traveling a fair amount for my job & will be gone quite a bit in the next month, but once I'm home we're planning to put it up. We're in Howard, near Lineville & Cardinal. It's a great area - we're within walking distance of the essentials, & 5 minute drive of just about anything we need. Tell your inlaws what a well-built house it is!

P.S.

just sent you a PM..

I feel your pain regarding what realtors and appraisers say our homes "are worth". I had the bad timing of building 2 yrs ago also.

Hopefully you find someone who can appreciate how the house was built. Push the low utility bills angle!!

ChrisJ

Posted By ChrisJ on 05 Mar 2012 03:49 PM
I feel your pain regarding what realtors and appraisers say our homes "are worth". I had the bad timing of building 2 yrs ago also.

Hopefully you find someone who can appreciate how the house was built. Push the low utility bills angle!!

ChrisJ

Here's the other thing...    My wife made some statement along the lines of, "the realtor wants to make as much on the house as he can too, so he's going to sell it for what it's worth". 

B.S.

I did the math on this.  6% commission.  2% goes to the buyers' agent.  Of that 4%, roughly half goes to the agency.  So, the actual realtor makes about 2%.  If a house sells for X or X minus $20,000, the difference to him is $400.  If I'm a realtor I'd much rather take $400 less, sell it faster, & move on to the next one.  It's in their best interest to sell FAST, more than to sell for a fair price.


There's another factor here - something I discovered personally recently.   I got into a bad car accident in December, totalled my vehicle.  I went car shopping & decided on what I wanted, so it was a matter of finding the best price.  Several dealerships had the car I wanted (I was buying used).  One dealership was a "no haggle pricing" deal - the price on the window is the price. Period.  Another was a more traditional dealership, where you can negotiate with them.  The 2nd one actually had the cheapest price, cheaper than the "no haggle" place.  When we started talking price, they pulled up cars.com & all of the other places selling comparable vehicles, to show that they were the cheapest (which I already knew).  They only came down on the price $200.  So I got the car for a really good price, but couldn't shake the feeling that they didn't move at all on the price.

My point is that no matter what price you're asking, "they" will always try to get a better price.  The realtor we talked to basically gave the price that he thought we could get for the house as what he'd list it for, but no one is going to pay "full price" in this market.

rant over.  wow....

Selling in a down market is going to be tough no matter what, but if you have the utility bills to prove it you can push the "total cost of ownership" angle of utilities + mortgage aspect against the comparables. You may not get the return you like, but it might make it somewhat easier to sell (if not as easy as the eye-candy aspects.)

It's definitely true that it's in the agent's interest to sell fast rather than highest price, especially in a market this slow.

It's hard to put a price on the additional comfort of living in a tight & high-R house, but it's definitely there, even if it doesn't command a resale premium.

If the agent doesnt give a rip in helping you sell based on your lower utility bills, then get a new agent. I helped my parents list their home. I put out an interview process and dozens of agents responded and interviewed a handful. There IS a big difference among agents and their clientele.

but you're right. The average agent is going to BS you to get the listing, nodding head that you'll get a big premium then after you sign up, they come to you for a price reduction. Most don't care about additional commission check, they just want the fastest commission check possible, more often that means beating you up to lower price.

Unfortunately, it is still a real tough market(except for elected our pigs in washington DC), but there is probably an agent that may specialize in "green" homes.

Have you considered For Sale by Owner? Might be worth a shot. Save the realtor commission and have more wiggle room on your bottom price. Appeal to those buyers out there like the engineer who bought Brock's house.

Whether it's a very energy efficient house with upgrades, or just a new run of the mill house, I can't believe you wouldn't take a beating selling it in this market having only owned it for 2 years.  Sounds like you've got the house you really wanted, in a great neighborhood.  With possibly 2 kids, do you really want to go smaller if you don't absolutely have to?  You could end up in a smaller house with higher enough utility bills that you don't gain much dollar-wise.  With interest rates as low as they are now, would a refinance for a lower payment be possible?

We actually sold our house our selves as well, really my wife did. The big thing is to make sure it is in the MLS and has a slightly higher buyer commission so other buyers realtor's will take notice. I have heard some realtor's wont even take clients to home that are for sale by owner, but it is what it is.

I am not sure how much you can end up getting for it, but you might be better off staying in that home unless your going to something substantially less expensive the loss you might take on the new house might not be worth it in the end. But you won't know till you have an idea of what you can actually get for the house. And you know this one was built well. And don't forget that big backyard for the kids You can't put a price on that, but that might be what helps it sell for what you want as well.

yeah, we sold our last house on our own as well - different market & a different price point, but it was incredibly easy & had an offer in something like 11 days. We have considered it, but also have found a realtor (the one I liked the most of the ones we talked with) that charges a 3% commission - 2% to the buyers' agent & he keeps 1%. If we did FSBO we'd have to pay the 2% to the buyers' agent anyway, so for 1% additional it may be worth it. We haven't decided yet.

Ironically, a friend of mine called me this morning & said his coworker wants to come over & see it, so who knows...

thanks for all the advice, and for letting me vent on this topic..

Posted By jerkylips on 05 Mar 2012 11:24 AM
Around 2+ years ago I had posted a lot of questions around building our first house.  We wanted to build something as energy-efficient as possible within our budget.  We ended up with a very efficient house, & 2 years later I can say that our energy bills have met our expectations.

Some of the things we did that were beyond our builder's 'standard package'

wall insulation was flash & batt in the cavities, with 2" of xps outside
R60 in the attic
all ceiling penetrations (can lights, etc), top plates, etc. spray foamed
box sills foamed
97% efficiency modulating furnace
very low u-value windows on west/north/east sides
high solar gain windows on south side (lots of 'em)

Probably other stuff I'm forgetting, but you get the idea..

All in all, we went.....maybe 5% over the original budget to do these things.  But over time, they'd pay for themselves...


So here's the vent part...

3 weeks before we were ready to move in, we found out my wife was pregnant.  We were basically told we weren't going to be able to have kids, so when we budgeted for the house, we didn't factor that in.  Two years later, we decided that we want to sell the house & get into something a little cheaper.  We had several realtors come over to look at the house.  All of them said, "having all of this energy efficiency stuff is nice, but you're not going to get any more money for your house because of it.  People won't pay extra for that stuff.  If you had granite countertops, you would probably get a little more for it, though".

I think most people who are building a house  THINK  they're going to be there long enough to make the upgrades pay off.  Of course, things happen.  As much as I hate to say it, if we do build another house, I'm really going to have to think about how much to spend on these kinds of upgrades, in case we have some other unexpected situation. 

Jerky Congratulations on the baby. Kids are the greatest thing. As a former appraiser I know of difficult situations in marketing and proving value. There are many properties with unique features. It takes a competent agent to market and sell such a property. I think it is about time agents learn the benefits and complexity of energ efficient construction. If they want to be called professionals they need to learn how to sell the benefits. That includes spreading the words to buyrers. Jerky, I think you need to find an agent that will agressively market the property and not take the defeatist attitude that there is no value to the improvements. Besides energy efficiency there is improved comfort. Indoor air quality is another benefit. There is a lot of speculation and growing evidence that the rise of asthma is the result of poor indoor air quality. Then there is the reduced cost of maintenace. I suspect the buying public has never been educated. The current buyer pool may be small but you have to market it to that group. It will take an agent willing to reach out and to also find a lender.

Posted By Lbear on 05 Mar 2012 01:33 PM

Posted By jerkylips on 05 Mar 2012 11:24 AM

So here's the vent part...

3 weeks before we were ready to move in, we found out my wife was pregnant.  We were basically told we weren't going to be able to have kids, so when we budgeted for the house, we didn't factor that in.  Two years later, we decided that we want to sell the house & get into something a little cheaper.  We had several realtors come over to look at the house.  All of them said, "having all of this energy efficiency stuff is nice, but you're not going to get any more money for your house because of it.  People won't pay extra for that stuff.  If you had granite countertops, you would probably get a little more for it, though".

I think most people who are building a house  THINK  they're going to be there long enough to make the upgrades pay off.  Of course, things happen.  As much as I hate to say it, if we do build another house, I'm really going to have to think about how much to spend on these kinds of upgrades, in case we have some other unexpected situation. 

I touched on this in another thread but what you are experiencing in regards to energy builds is very true. People don't buy houses because they have high insulation and great performing windows, people buy houses first on location, second cost, third size, fourth on interior finishes/layout. Energy comes in somewhere 8th or 10th.

That is the fact and reality of the "green building" and ROI. If you look at it as a "business decision", building green is a losing investment. One will not even break even in the first 5-10 years after the build, it can take 10-20 years to break even on all the energy upgrades if one tries to sell their home.

There is a reason WHY tract builder homes sell, they are cheap and easy to build and have all the things people want. Unfortunately energy conservation upgrades are not one of them. People are not willing to pay a premium for that, they will pay for more interior upgrades but not for insulation that is behind the wall that they will never see.

Why do you come to this site. It seems that you dont belive in the benefits of energy efficiency. You offer no solutions. I will use your car analogy. Well years ago no one cared about gas milage and now you have choices between 20 30 40 and 50 MPG cars. The homes you support are the 20 mpg home. For a little more you can get a 30-40 MPG home. They make financial sense. Now a net zero or PH is over kill and will not make financial sense. The thing to do is to show people the value of the 30-40 mpg house. These are home that come close to the 10 20 40 60 rule as promoted by BSC.

Posted By Roberth on 08 Mar 2012 04:06 PM


Why do you come to this site. It seems that you dont belive in the benefits of energy efficiency. You offer no solutions. I will use your car analogy. Well years ago no one cared about gas milage and now you have choices between 20 30 40 and 50 MPG cars. The homes you support are the 20 mpg home. For a little more you can get a 30-40 MPG home. They make financial sense. Now a net zero or PH is over kill and will not make financial sense. The thing to do is to show people the value of the 30-40 mpg house. These are home that come close to the 10 20 40 60 rule as promoted by BSC.

Are you asking me or the OP who is venting about how building with energy efficient products does not always have a good ROI?

I will answer for me. First, I am not an environmentalist but I believe in wise building and I am a realist and I know that a lot of these techniques are out of reach for most people. 95% of people buy ready-built tract homes and custom homes, which most energy builds are, make up the remaining 5%. What I am looking for is a way to build a solid home that provides good energy return but can do so without breaking the bank. And maybe I will not be able to accomplish this, in which case I will not build.

There are plenty of disgruntled forum members who built utilizing green products and now feel that they made a bad investment. The OP is not the first, nor the last.

I don't advocate building unwisely. Your analogy of me advocating 20MPG homes is not accurate. To build upon your analogy. Some cars got 10 MPG back in the 60s and 70s. You can buy a car today that will get 30MPG or 40MPG, and they are fairly reasonable in cost. Then you have the Chevy Volts, that are sold as "green cars" but cost $45K and only go 25 miles on a charge before they need gasoline or another charge. What I am stating is that the Chevy Volts are NOT a wise choice, and this analogy translates into some of the green home energy stuff that is pushed out there also. Not all of it is a good ROI & some of it is plain ridiculous.

It appears that he did not go anywhere near a passive house/net zero design. His walls dont ever approach R40. Dont know if he went 2x6 or 2x4 but he has 2 inches of foam. Spray foam in rim joist. With good marketing he should be able to get a little more for his house. I would liken his house to a car that gets a little better milage and not a hybrid.

A home is like a car, you drive it off the lot and its worth less. Same thing happens with homes. Top that off in that econmy is depressed and its a rough time to sell.