APR for Houses

One of the great banking laws in this country is the mandatory APR for loans. That’s a calculation that allows consumers to easily compare loans that have different fees, terms, and rates, making it all apples to apples.

We need the same type of law for home buying. The formula should show the total cost of the home including energy use, water, and maintenance, under some standard set of assumptions.

That sort of number would be a big help to consumers. But more important, it would give home builders an incentive to exceed minimum energy efficiency standards, and make maintenance cheap. At the moment, energy efficiency is somewhat invisible to the buyer. Buyers aren’t willing to pay more for a vague concept. But they might pay more for a home that costs them less in the long run, if they trusted the calculation.

That's my world-saving idea for today. If that doesn't save the world, I will come up with something else tomorrow.

Comments

[Bobby Jones]

Holy crap. Someone may actually take this blog seriously.
http://www.beazer.com/esmart/

[Andy Coulter]

i put new windows, siding and extra attic insulation into my 38 year old house. Problem pretty much solved short of solar panels.

[RPK]

It sounds like this focuses mainly on energy usage, similar to Energy Star for appliances and EPA ratings for cars. But believe it or not, there's more to it than that.

A huge part of the cost of a house is property taxes, at least where I live. Since those taxes are local, and dependent on annual budgets drawn up by brain-dead town council members, they are impossible to estimate accurately. They can vary widely town to town and state to state. The best you can do is assume they will always increase.

Maintenance costs are another big item. Builders will tell you that new houses won't need any work done on them for years, but don't bet on it. Older houses need constant upkeep, but it's different for each one. How do you estimate that? Can you predict when a hidden pipe will start to leak?

Then there's appreciation, (or depreciation), of the value of your property. Do you calculate that into the total? If a new development of expensive homes is built near your house, your value should go up. If the neighborhood gets taken over by gangs of drug pushers and prostitutes, your house could be worth next to nothing.

In other words, too many variables for this to be done with any usable accuracy. In real estate it has always been about Location, Location, and Location. The APR or TCO of similar houses in different locales can be very different. I'll bet Al Gore pays less for property taxes and electricity on his big house in Tennessee than I do for my little house in Connecticut.

[Sam]

The problem with any such rating scheme is that it will soon be hijacked by special interest groups (aka manufacturers) and start mandating particular technologies. You'll end up getting points for "having a solar panel", regardless of its output, or how sunny it is at your house. If you want to quote a single number, quote "price to heat home to 72 degrees in winter" and "price to cool home to 78 degrees in summer".

[ali]

http://www.fasilmeyhane.com

[Surabaya Stew]

Hello again Scott,

As an Architect, I can tell you that while the details would be hell to work out (and not quite as easy to compare, due to differing occupancy and usage loads), your idea is not only good but in fact would be a godsend to us hardworking professionals in the building industry. Right now, all these facts and figures and statistics that are used to calculate energy efficiency are contradictory and confusing. Plus, they don't give the entire picture.

However, what would be the best way on enforcing it though? Government mandates? Tax breaks? Societal pressure? Personally, i think this movement should gradually eased in starting with new construction, then higher priced houses and then urban dwellings. I believe that the rest of America (and the world) will follow eventually, because once you have real numbers to compare and relate to, the entire experience of house buying will be transformed away from counting amenities and on a path of sustainability and saving money.

Cartoonists come up with the best ideas!
:D

[Tanmay Kumar]

This may be old news now, but it deserves strong and repeated mention to get anything done these days, so here goes. eD says "...just hit the print screen button and copy the strip to your favorite..." Someone else put out a bsh script. That's all fine and dandy.

But here's the thing: I JUST WANT TO READ THE F/U\C|K-I/N\G STRIP; I DON'T WANT TO HAVE TO SET UP A WHOLE I.T. DEPARTMENT JUST TO GET TO IT.

I deal with the Constrictor of IT Services everyday at work anyway.

[spike17]

Dude,

Do you ever calculate the off-topic comment ratio? If you did, I'm betting this one would be an all-time high......unless that's part of your plot to save the world........

[Peter Payne]

Hey, digg this idea:
http://digg.com/business_finance/Suggestion_for_Housing_APR_for_Housing

[Frank]

Another big money factor these days is the commuting time, cost, and distance to work and other services. This site:

http://htaindex.cnt.org/

Has a map showing housing affordability including commute times (it looks like with the assumption that everyone works downtown). This site:

http://walkscore.com/

gives an address a score of 0 to 100 depending on an approximation of how many services can be walked to from there. It's not perfect: if you lived on an boat anchored in the middle of the East River, you'd probably still get a score of 100. But it's still a cool hack.

[HannahsDad]

For a long time I've wanted to have a T-shirt with the words 'I fear change' printed on the front. I think I may have found my target market.

Wanna go halvers, Scott? You can have 'Dilbert.com' on the back.

[Leslie]

Scott, I dunno what people are complaining about with the website, but I love it, and it works fine on my computers. Good work with it, and I love the mashup stuff. Seriously, I'm addicted.

[John Reedy]

I saved the world yesterday, sadly...nobody will ever know, things just go on as usual...

http://awritersblock.com

[jerry w.]

How about an APR for horses, all that hay and oats add up, you know.

Also, as it's been said hay is the first stage of horseshit.

And this is an election year.

Do the math.

http://boskolives.wordpress.com/

[John]

Hi Scott! I wonder if you can put some more ugly animated shit on the Dilbert.com homepage. I mean, it's not like I go there for the actual comic or anything! Which, by the way, does not ever load for me! Har har!

Seriously though, I don't want any wizz-bang shit. Just give me the fucking comic, in black-and-white. Or don't - I can get along without it, too.

[Mike]

It's easy to do this.

You can call the electric/gas/water companies and ask what the historical average use is for a house you're looking to buy. True, you've got to take into account the current residents (ie: old people like it warm, fat people like it cold, etc) but you can get a general idea.

[Jeff]

I enjoy viewing Dilbert first thing every morning when I get to work.

As Amy posted here: http://dilbertblog.typepad.com/the_dilbert_blog/2008/04/apr-for-houses.html#comment-111712188 , I can't install Adobe Flash here at work.

It would be nice if the new site offered an option to view the Dilbert site the old way, and perhaps saved the viewers preference.

[John]

We should extend this principle to everything. All price tags should have a comprehensive estimated TCO. That way at least we would know what we are getting into.

[Derek]

If consumers wanted this it would already be demanded of builders. There is no need for big brother to get involved.

[eD]

Scott,

I have to think that the new website design was forced on you by United Feature Syndicate Incorporated. I'd hate to think it was your idea or you in any way participated in the concept.

I like to think you're the kind of creative person that will fight for his brain children. This was just the sort of thing that made Bill Watterson hang it up. He had no tolerance for seeing Calvin and Hobbs corrupted.

The animations are a HUGE MISTAKE. GET RID OF THEM. I want to be able to place the voice of MY boss in the PHB's balloon, and MY inept coworker in Wally's balloon, any MY AA's in Carol's. Not some marginal voice actor.

By the way people, I've never saved the strips myself, but to those of you who do: you can always hit print screen then paste the screen shot into to your fav image editor. A little more work, especially for the Sunday strip, but it seems to be the wave of the future.

[Papasik]

offtopic:

continuity broken in today's strip. In pic 1, Asok holds a phone in his right hand and grabs his chest with his left. In pic 3, he still has both hands in this position but this time, his left hand is lifted holding the empty space where the phone was, and his right hand is on his chest.

[Jason Dumler]

Someone said you couldn't calculate all that stuff. That's silly. Of course you can calculate all that stuff. The idea is to come up with a *rating*, not an accurate measure of how much the house will cost. That way, generally speaking, you know whether or not house A is more efficient than house B. It would take a little while, but people would work out whether 1 point of efficiency is worth $10,000 more over 5 years or not.

Also, you can't save the world in one day. I expect to see another idea tomorrow. Whenever *tomorrow* happens on your blog.

[simon]

love the new site, well done, and dont listen to the 1% complaining ... can you please sort the blog link though ...

European houses already have this (Energy certificate in the UK ) and its a legal requirent.

and our cars get better MPG too (and look great , and go round corners)

Admit it scott you want to be European (but obviously not French)

[Ed]

This is already law in Europe :)

For example, it will be required starting from 2009 in Italy.

[Amy]

I'm sure it was difficult for all the people slagging off the new Dilbert site when computers shrunk from being the size of a room or when this new-fangled internet came about, but seriously, get a grip people. Things change.

[Patrick]

Hi Scott,

I really enjoy your website, and read your comic and blog almost every morning. Unfortunately since you have upgraded the technology on your website, I am no longer able to read the comic.

Most offices do not allow people to add software to their own computers because of virus risk, and they slowly upgrade versions of internet explorer, windows etc., in order to make sure they are well tested before being rolled out to the whole company.

Because you have switched to using the newest version of adobe flash player, all I get is a prompt to upgrade my sortware which I can not accept. I'm sure that many of your readers encounter the same issue if accessing the site from their work computers. It might be better to upgrade the technology more slowly on your website, or to have a backwards compatable link, where people can see it displayed in the old way.

[jmc]

Energy Star rating for homes: good
Your new website design: really really bad. And slow. Ick.

[kettu]

That might not save the world, but it's a small step in the right direction. Let's see what you come up with tomorrow :-)

[Vijay]

Good one, Scott. I would like to have a solar home in the future, I am willing to forgo some convenience for the cause of humanity or the greater good. Oh does it exist? But you know I just like to think it does :)

[Annemg]

Just what we need, more regulation by an inept government. @@

[D. Mented]

Bonus energy saving tip!
A small, low-power exhaust fan in your attic space, run automaticly with a high-low limit switch so it shuts off when it's cool and also if there's a fire, can lower your house's temperature ten degrees. That same ten degrees, if provided by an air conditioner, takes about four times as much energy (sometimes more)
D. Mented

[Mr Cranky]

The flaw in your plan is that today is the last day the world can be saved.

And your plan is weak. How much have the mandatory mileage stickers and mandatory energy stickers affected consumer behavior? And if anything is clear from the present mortgage meltdown, it's that most people don't know what they're doing when committing to a mortgage.

[ROSSIU]

While it indeed already exists, it would be nice were it implemented in the US. I'll be looking forward to your world saving idea tomorrow!

PS: Please bring back the old Dilbert website.

[Sam Vass]

Your comment is not only not new, it is already required for children to learn both arithmetic and algebra in school. Most teachers, politicians, and even college graduates can not understand mathematics, especially Republicans. The problem is trivial. sam

[GK]

In Australia we have the Energy Efficiency Rating (EER) for houses, that works like the star system for appliances. While it does give a bit of an idea about energy efficiency, it doesn't do it very well, and does not allow price comparisons such as Scott has suggested (and I think is a very good idea ini a market-driven society like ours).

Another problem with our current EER system, is that 5 stars is the minimum rating a new house must comply to, whereas we expect '5 stars' to mean it achieves the maximum possible efficiency.

While the calculations are difficult, and vastly affected by how the house is used (not just how the house is built), I think there is merit in the idea that is worth pursuing.

[Fuzznboo]

Something http://www.nytimes.com/2008/04/22/health/22stro.html curiously similar to your previous speech problem.

[burt]

haha too many variables. besides. who in congress actually cares. and al gore certainly doesnt. u realize his mansion is 20 times less energy efficient than Bush's ranch. godamn hhypocrite

Burt (hypocrite-hater) trub

[Tanmay Kumar]

Screw the world. Just give us our good old dilbert.com back.

Puhleeeeeeeeeeeeeeeeeeeeeeeeeeese....

[Tanmay Kumar]

Screw the world. Just give us our good old dilbert.com back.

Puhleeeeeeeeeeeeeeeeeeeeeeeeeeese....

[Dim Sum]

In Canada we have a lots of problems with leaky condos. Would it take into account the costs with fixing leaks?

[adora]

That's a great idea. Consumer Reports recently launched a "true cost of ownership" for car reviews, which includes depreciation, maintenance and repair cost. It gives people a better idea of what they can afford.

I agree with the previous comment that it needs to concern the number of occupants. It depends on cities and neighborhoods. Like the car testing in consumer reports, they use average mileage to come up with the data. The APR for homes would use the average of the area.

The APR for homes would probably end the ridiculous trend of having 2 side by side sinks, 2 toilets and giant roman tub.

A recent study shows that most new home owners can't really afford their homes. Too many people believe that "$999 per month" on the ad is all they need.

[Ryan]

I want to be able to see the old strips with navigation buttons like before. At the top of each comic strip there should be nav buttons like "next strip, previous strip" ...

I like the animation thing, and even mash-ups might be kind of funny, though I am very tempted to have Asok say something like "Pwned" or "All your base are belong to us" after exploding that guy's head.

Just kill the laggy flash, it's entirely unneccessary for a simple thing such as displaying a jpeg image (which even loads on the page behind the flash!)

Ryan

[Jonathan]

Yeah, WTH is up with the new Dilbert.com page? Tell whoever it is that runs the server that "text/html; charset=utf-8lias" is not a valid Content-Type response header.

[Kent McManigal]

Why make it a law? We already have law pollution in the world. Just start a business that figures out the cost of houses for prospective buyers. Everybody wins that way.

[wilhelm]

while we are talking about world saving ideas: changing back to the old dilbert site would definitely be worth a try.

[Robby]

Given all the factors that affect energy consumption, such a calculation would be impossible for new houses, and for older houses would require several years of data such as most consumers don't have time to keep. This is the case with most of your world-saving ideas: they're really good at first glance, but the details are impossible. I suppose you're not a detail man.

[Jay]

Unfortunately, the APR of loans can be gamed like any system. They do this by excluding certain fees from the calculation. (Is the "title insurance" included? Maybe not in this loan :)

Anytime you have money involved... fair is not possible. Just ask the right questions, and don't be the fool.

[Morriss Partee]

This is a great idea. But surprisingly, it looks like the U.S. government has beaten you to it. We've had the Energy Star rating on refrigerators, dishwashers, washers and dryers for awhile. Now Energy Star is rating homes too: http://www.energystar.gov/index.cfm?c=about.ab_index

[Tom Hundt]

Yeah that's a good idea -- kind of like the labels on appliances. Another incentive for builders would be to add value by getting a house Energy Star qualified, see http://www.energystar.gov . This site also has general info on things to pay attention to when looking at home energy efficiency.

[ortelius]

Thumb down, not good idea today. Your country probably doesn't need any new law as legal system is already too complicated. But, maybe, some of your relatives is layer; in this case, I understand.

[Green Grant]

Good idea. Sort of an Energy Guide chart (like some individual appliances have) but for the whole house. "This house will cost $xxx a month in energy/water."

[Jean Jacques Humbert]

This has been put into law in Europe about two years ago: http://en.wikipedia.org/wiki/Directive_on_the_energy_performance_of_buildings . In Austria and Germany this has already been implemented: It's called an "energy pass".

If you sell your house you have to provide the pass to a prospective buyer so that they can access the energy consumption of the property.

[friskybeaver]

My plan is to build a giant laser capable of destroying the world. Then, barring some sort of unfortunate accident, I'll simply not destroy the world, thus saving it.

[Bruce L. Wailes]

Scott,

The biggest thing that you could do to save the world would be to ditch the flashtastic crapfest that is your new web site and go back to the old, perfectly sufficient one.

Just sayin'.

[Ray Ward]

Good ideas. But with gasoline prices continuing to rise, proximity to downtown (or wherever the most jobs are nearby) is a big chunk of how much it costs to live someplace. A lower-priced home in the suburbs isn't so much of a bargain if you pour all the savings (and then some) into your gas tank.

[Chuck Eames]

Just like the Energy Star rating on appliances, they're doing it now with some houses. Great concept Scott.

[mr tom]

Yep.

Do the same for cars as well.

Base it on doing 20k miles per year, servicing costs, repairs based on vehicle reliability data, quote two figures - one now and one based on 25% petrol price rises.

[DF]

The flourescent light bulbs are supposed to save lots of money over incandescent, and you might notice the change if you switched your whole house. Energy efficent appliances would help, but how many people keep those tags that come with them to show buyers how eco-friendly they are? I think if would be a great idea, but this would take a long time to come into effect, and would probably only affect new homes, not pre-existing. There are too many crooks that would lie and cheat the system to make it viable. Will this idea save the world? No. But it would make people more energy wasting aware, and it is a good idea at heart.

[jonesenstein]

I thought the world was already saved:
http://dilbertblog.typepad.com/the_dilbert_blog/2008/04/good-news.html

[Smith]

Same should go for prostitutes. They should go into a government agency and be judged physically and psychologically in some sex-related tests. After she's given an overall number rating that they wear on their clothes somewhere.

That way when you see a hot one with a low score she probably is pretty messed up in the head and might try to murder you. Some fugly one with a high score must mean she's a freak in the sack (In a good way).

Just savin' the world, you know?...

[Green SAHM]

Well hurry it up! The world can't wait for you to figure it out!

[Rand]

A good idea, but I don't think that it is feasible to implement. For cars, fuel consumption can be calculated based on the efficiency of the fleet that was tested by the EPA, but how would you do the same for houses? You'd have to have data on houses that were constructed the exact same way, but houses are much more differentiated. Before a builder builds the house, there's no way to get hard numbers on the energy efficiency (back to a vague concept). When selling an existing house that had energy efficiency upgrades the seller probably already does tout the benefits.

[Patrick Havens]

Home builders used to skimping and saing will be the first to sign petitions against this idea, and send in money to fight it. It would require them to actually think before buying the cheapest materials possible in building their homes.

Today, you can be sure that the home you buy will not last as long as a home built in the 50's and 60's... and its just getting worse.

[Dave Nicholls]

Scott,

The UK doesn't have exactly what you're suggesting, but we do have these:

http://www.homeinformationpacks.gov.uk/consumer/17_Energy_Performance_Certificate.html

They're part of a pack that has to be provided when you sell a house. I'm not convinced they're that useful for most of the UK housing stock because there's often not much you can do to fix any issues. For example my house is old enough to have solid brick walls making cavity insulation a tad tricky.

[Dave]

It won't work and it's already being done (it had to be said).

[Pablo]

And for apartments, as well. At least homeowners can invest to remedy a home's efficiency. Apartment dwellers have no power to fix the problem, and the apartment owners have no incentive to fix the problem.

[MK01]

I just tried to register on the crappy new Dilbert.com BETA so that i could leave a comment telling you that i wasn't impressed with the new layout. (I want to read past strips easily!!)

When i tried to register, i was sent an activation email with a link that didn't work: "That link is not valid, click here to go to the main page."

I've tried twice now.

Your new website sucks, Scott.

[Volker Hetzer]

Great idea, we'll do what you say, just give us a few months. It will become mandatory in july this year and is called "Energieausweis" (that is, "energy passport"). Quick work huh?

Greetings from Germany!
Volker

[John]

Well I don't think you need to come up with an Idea tomorrow. This will obviously save the world by causing consumers to be happier since they know what they are getting, they will be more likely to buy houses that consume less recourses since it saves money. Shortly this will decrease the reliance on such fuels while making everyone happier reducing the chance of war, and saving more time for curing disease. Sir, you are a GENIUS!

[Shan]

Good idea. Let's hope it saves the world.

[D. Mented]

That sort of rating exists on appliances. Look at your water heater, it proabably still has the sticker showing its relative efficiency compared to what's available in the industry.
Wouldn't be too difficult to figure out a ballpark estimate for houses.
Fortunately, people who can't afford the top efficiency model house when they buy it can do a lot later - as the appliances need replacement (or funds become available) they can get more efficient ones, they can add insulation, in hot climates, they can replace a fashionable dark colored roof with a more energy efficient white one, even replacing light bulbs with more efficient ones does a lot.
After an expirience in a rental house, I highly recommend heavy curtains on all windows (cut our heating bills in half without the high cost of replacing the leaky windows in a rental house)
My world-saving idea is better public transportation. Overhead tracks reduce the damage and property siezures needed in an established city, and effective public transportation is vastly more energy- efficient. (ineffective public transportation usually means a bus system that is slow, contains no express lines, shuts down at sundown, doesn't cover a lot of the city, charges for parking at main hubs or has no parking, and the busses don't stay on schedule...Kind of like almost every city in America)
D. Mented

[Mr. Wampus]

They could use the energy guide for appliances as the model. That would just show a sliding scale of energy efficiency for similar sized homes in the same region with a mark on the scale showing where that particular house fits on the relative scale. You could actually have a couple of scales, one for electrical efficiency, one for water efficiency and one for amount of sustainable/renewable building material content.

Of course, you would need some kind of agency to set the standards and enforce the rules to keep builders from just marking their products at the "most efficient" end of the scale.

[Brandon]

What did you do to Dilbert.com?

[James]

Still going for that Nobel prize then? Well done, and keep them coming.

[Arby]

Yes, this true value and cost concept is currently fought tooth and nail by certified real estate appraisers. They currently use archaic standards and appraisal concepts that do not give the real market value of real estate based on the items you mentioned.

For example, they treat a renewable energy solar electric system the same as a swimming pools for valuation purposes. The pool does add value they admit but is limited by the obsolescence they factor into based on physical deterioration realized or expected.

On the other hand the solar electric system reduces the home’s actual energy cost and its true life expectancy is decades as guaranteed by the solar equipment manufacturers.

Energy saving amenities to appraisers are just that, amenities. And as such are attractive but they do not to them add value to the home due to the same obsolescence factors. Storm, double and triple pane windows, added insulation, awnings, new energy efficient appliances, fans, solar water and pool heaters, set-back thermostats, passive applications like landscaping, trees, window position, green and energy efficient home improvement products, are all considered amenities.

Many of these last for decades have little physical deterioration and are often under long or even lifetime warranty.

Not all home owners want pools but who wouldn’t want an energy efficient home with passive and active energy saving (and producing) systems on their home. All these energy saving amenities cost to install, so why shouldn’t the seller be paid for offering them and the buyer smart to invest extra for them.

The appraiser is really working for the lender to protect the loan’s collateral value. But they often go overboard to undervalue the property based on tight lender lending and underwriting criteria. Some lenders do offer “green home loans” but they often cost the same as other loans and the lending criteria are much the same as conventional loans.

It is interesting to note that very very few if any homes in foreclosure in this country have solar systems. Duh, wonder why?

[Tony]

Just looked out the window and the world is still there. So your "world saving" idea is working so far :-)

It might save the economy too, as a whole new industry springs into being to examine house plans and measure the total cost of ownership for houses. The cynic in me says that more of this industry will be dedicated to making the numbers for existing building methods look good than to actually making houses that are cheaper to own, but that's capitalism for you.

It could have some interesting effects on migration patterns. Right now the houses in Freezeyourbunsoff Wyoming look enormously cheaper than those in Pleasantville California. But your "APR" sticker would point out the extra costs to heat the house in Wyoming to the point where the oxygen in the air is no longer likely to condense into puddles on the floor. This might cut that difference in price down to merely huge.

[Rogier]

Scott, the Netherlands already has this concept since January 08 and it hasn't saved the world yet, I'm afraid... :-)

http://www.tudelft.nl/live/pagina.jsp?id=d42a1926-1300-4432-8b0b-4b62e22054cc&lang=en

Cheers

[spoilsport engineer]

I love this isea, but it will be hard to implement.

One problem is the way we are conditioned to disregard total-cost-of-ownership claims as a marketing smokescreen to cover high initial price. But that's only because that's the only reason people produce such claims these days.

Another problem is the inevitable way that shoddy builders will attempt to claim that making standard assumptions that will allow us to *predict the future 30 years out* is an exercise in futility. (Sad thing is, it doesn't matter since we're comparing two guesses, and since people generally only own a home for 7 years anyway).

It may also be hard to compare the two numbers for that 1600 sq ft rambler and that 2200 sq ft split level. The houses aren't all that similar, so what will the numbers mean?

Then there's the problem that, with appraisers notably dishonest, we won't be able to trust the numbers even if we get them.

And there's no way to verify the numbers except to buy the house and live in it for a couple of years, by which time the seller and appraiser and everyone else in the transaction is laughing at you from a beach in Aruba, while you're pushing caulk into the cracks in Fargo, and wondering if the frostbit will ever heal.

Perhaps a good computer program that you'd type in a description of the house, and it would grade the expected energy use. And you could enter a couple years utility data from the previous owner to verify the model's estimation. This could work.

The trick would be to find somebody to write the program who didn't have a vested interest; so not a maker of insulation, windows, heaters, natural gas or electricity, and not a realtor, broker, or banker. Shoot. I guess that leaves you. So all you have to do is go back to college and get a degree in computer science and another one in civil engineering, and then get to work programming.

[GLK]

Good idea. I live where winters can be brutal and homes are mainly brick or wood shingeled construction that were built in the 1940s & 50s. The homes are expensive due a high ranking public school system and a close proximity to a nice shoreline lined by multi-million dollar estates. High property taxes also come with the territory. Most of the lesser homes are very well kept but many still have single pane steel framed windows, zero insulation, no central air, etc. Still, as long as they look quaint and pretty they sell (it took our neighbor 2 weeks to recently sell her home) and lack of energy efficiency hasn't affected the prices around here one whit. As buyers become more energy concious and newer, larger homes in competing suburbs offer a better energy value I've wondered how long this can continue? But, so far the old axiom of "location, location, location" has proven to be the only thing that matters.

[pureevilmatt]

I could be very wrong, but I think the real estate appraisal industry has some sort of system not unlike what you've described. And it doesn't just apply to new homes being built; retrofitting an already existing home for solar power or geothermal heat exchange will increase the market value of any home. Having some sort of oversight or regulatory organization is a good idea, but hardly world saving.

For tomorrow's world saving idea, have you considered mandatory vasectomies shortly after at birth for all new babies, combined with the tar-pitting of anyone born after the year 2000 when they reach the age of 60? Potential energy savings over the long run are immense.

[Leslie]

Man, just a day for it to save the world? Kinda high standards, don't you think? All the same, I think that's a great idea. I wish I knew how to help these kinds of ideas get put into action.

[Captn Rob]

Scott,

Not so sure your on to something. I have been in the new home industry for over a decade. Some buyers may like your calculation, but sadly most buyers just want to know how much home they can get for how little money. I don't see them paying more for something that will cost them less in the long run. If builders gave it to them for free they would like it as long as they couldn't get an inferior home for less money from a builder giving them a "free cabinet upgrade"! A greater impact on homeowners is property taxes. Most run into difficulty when they underestimate the impact property taxes will have on their total monthly payment in the long run.

Another component of price that gets overlooked is the fees levied on new construction from municipalities. These fees are a ever increasing burden on new home buyers. These fees such as impact fees and hook up fees are a form of tax being passed on to buyers of new homes. Local Pols get away with imposing fees because they are easier to pass, not as visible nor require the same vote as a tax increase. They get to have their cake and eat it to.

[chuck]

Great, now what exactly are a "standard set of ASSumptions"?

The cost of electricity, heat and water fluctuate wildly depending on where you live in the country. Maintenance of a house where is rains a lot can be higher than somewhere is doesn't rain as much.

Where I live, property taxes the other side of a bridge can be 3-4x higher than my neighborhood.

[rita mae]

No way could a calculation be feasible for your concept. Too many variables. If you have little ones playing on the floor, you keep the heat a little higher. If you don't, you turn the heat down. If you are young, you put on an extra sweatshirt (inside out), if you are old, you crank the heat up so high that visitors sweat like a whore in church. Water usage? No way. Some people shower a long time, some just wet themselves. (I said "wet themselves" tee hee) Some leave lights on for ambiance, some like the dark.

When you look for a house, you don't think as much about energy use, water, and maintenance. You look for bedrooms, bathrooms, square footage, the neighborhood, etc. There's no doubt we should care about energy, but I don't think so many people do.

Let's have some straight talk here, Scott. Penis. There. You have to know some people missed that. Just trying to help out anyway I can.

Rita Mae

[Stephen W. Stanton]

In general, disclosure is better than an estimate based on assumptions.

Investing is all about people with different estimates trying to do better than one another. I think a house is worth 8, you think it's worth 10. I sell to you for some price in between.

Cookie cutter estimates limit our abilities to do this... Better to disclose the inputs and let people figure out the outputs.

Regulation would be best served by requiring "plain english" disclosures in a standard format... But no estimates.

FV estimates are largely what caused the current credit crisis... When the market moves, all estimates are proven wrong at the same time. Better to nail down some objective truth vs. assumptions.

[Dan]

APR does not actually let you compare apples to apples.

The government doesn't regulate which fees that you have to put in the APR. Brokers get around this by creating new fees with different names, and then not adding them to the APR.

[Patrick Burt]

I like that. What about factoring distance to city centres or locations like grocery stores?

[Moondawg]

Here's something the government could do to help us out RIGHT NOW: Subsidize Geothermal HVAC systems until they are cost-competitive with electric and gas.

Then show people the $1000/year they'll save over their existing HVAC solutions. If that doesn't work, show them a big screen TV... "You can afford a new one every year with the money you'll save!"

Encourage all states to implement "net metering" laws, which allow homeowners to generate electricity and sell it back to the grid.

Just those two solutions would allow consumers who give just two little shits to live nearly energy-independent. And here's the kicker, they could damn near afford it.

[Slap D. Monkey]

Wouldn't work. It would be like in Consumer Reports when they report on used cars and give stats for maintenace and reliability. If the model is new or just a year or two old, no stats are available, or if they are available, you probably would be an idiot to trust them.

Same thing here. The builder would not be held responsible since there are no stats on that house because it is new. The responsibility would fall on subsequent home owners who try to sell the house later on. I agree with full disclosure, but come on . . .

[Arnonym]

Problem with these "standardized" formulas is that all the parties concerned will take part in defining it. Which results in a formula that is so unspecific, that even the worst thing gets a good-looking value...

[Jeffrey Fredrick]

Scott, really enjoy your World Saving Ideas (WSIs). Keep them coming!

Jtf

[Hari]

Not a bad idea. You could probably also make the law include total cost of ownership for cars using a comparable set of options.

On another note, is there any way for us to switch dilbert.com back to the old page instead of this one that's labeled beta? The new one is taking forever to load, plus it doesn't have the drop menu of the other strips. Dogbert didn't impose a rule about Dilbert being the only comic we're allowed to read, did he?

[Ross]

I like this idea: Just live the DoE stickers on appliances, and EPA mpg stickers on new cars, I'd be glad to see the same kind of thing on a new house. Don't know how you'd get the numbers (it's hard to laboratory-test a house in the same manner as a car or freezer), but I'd love to see this.

[Dr. T]

Over here in Germany from 1st of July onwards anybody who wants to sell or rent out has to present an energy certificate for the facility. Generally, the expected energy usage which is certified has to be determined by some qualified engineer. For large (>4 flates) or old (before 1978) houses it can be calculated from previous usage.

[TheOtherOne]

I think that "if they trusted the calculation" is key.

With new homes, you have the problem that the house may not have been built to the calculated specs. (Like someone got cheap on the insulation, so the house is less insulated than the numbers show.) But I guess that if you trust the home builder to actually *build* the house, you might trust their numbers.

With a used house, though, to what extent do you trust the seller and/or agent? We've been burned by a seller before (our realtor neglected to tell us that the house we bought was being sold by *his boss* and that the termite inspection was done by a real good buddy of said boss . . . ). I'd be *very* reluctant to trust the seller's numbers.

If enough people don't trust the numbers, it's no good.

Unless there's some way to design a system where the buyer can be penalized if the calculations are more than a certain amount off? But then you'd have to consider whether the buyers were intentionally wasting energy in order to make the numbers come out that way.

(Yes, I can be paranoid. I know it and embrace it.)

[piepton]

I don't know that it will save the world but it is certainly a good idea. Implementation might be a bit of a hassle though. Especially since the current regulations on housing don't seem to be enforced very regularly.

The little socialist in the back of my brain will kill me for saying this but it might work better as a private industry. Pay some guy $500 to come out and give you a real price estimate on the house just like you would normally do with a termite inspection or a plumbing inspection.

[Lana Nikolai]

Yes, we are not there yet. Thank you for bringing it up!We never take energy efficiency into consideration.I hope the trend of energy efficient homes catches on.. it is supposed to save homes $9000 per year.

Not only are people anti-progress, but they are against making money!!
Farms in Texas are suing neighbors for having windmills. The windmills generate 1.5 Megawatts perday, enough to handle the needs of the average household for an entire month. Or thirty homes per day.
These farms could MAKE thousands of dollars by joining the windmill farms.

Happy Earth Day!

[Barnado Millionaire]

The UK govenment recently tried to do something like this (http://www.homeinformationpacks.gov.uk/).

Being as it is that they're really left wing, they tried to do it in such a way that completely over-regulated the sale of houses leading to no one wanting it leading to it being watered down to the point of uselessness and then introduced anyway.

God bless socialists and their convoluted solutions to problems.

[LA Clay]

It's more of a marketing technique than a world saver.

[Deb]

This should also be mandatory for apartments. While my daughter had been searching for an apartment recently, the differences are evident but not all new renters will remember to take everything into account.

[Mike Scott]

The problem with this idea is that you would need to pay for several different experts (I make it a gardener, an energy assessor and a surveyor, at the very least) to come and visit your home in order to come up with the figure. So it might cost you $1000 up front before you could start to market your house.

[Joshua Ungerleider]

Good point, I don't think many people fully see how much they might save being more efficient, then again, those corkscrew light bulb things seem to be catching on.

[rob kay]

Interesting. Kinda like the energy savers logo on appliances. I heard of a new invention that you would like. It's a light bulb that changes color with the cost of electricity. When electricity is cheap, it's blue. When it's expensive, it's red. All it'd tell you is how many people are drawing power, but it'd be a visual reminder of just how much you're paying when you run the dishwasher and the washing machine at 5 pm, and how cheap it is to do so at midnight.

[Lana Nikolai]

Yes, we are not there yet. Thank you for bringing it up!We never take energy efficiency into consideration.I hope the trend of energy efficient homes catches on.. it is supposed to save homes $9000 per year.

Not only are people anti-progress, but they are against making money!!
Farms in Texas are suing neighbors for having windmills. The windmills generate 1.5 Megawatts perday, enough to handle the needs of the average household for an entire month. Or thirty homes per day.
These farms could MAKE thousands of dollars by joining the windmill farms.

Happy Earth Day!

[CarlM]

You're talking about TCO (Total Cost of Ownership). Certainly this is a good idea for ANY long-term investment.

[Joel Coehoorn]

The calculation changes every time you get a new major appliance, furnace, water heater, roof, etc. Since during the normal 30year term of a loan you will do several of these such a calculation would really be meaningless.

[David]

Be careful what you wish for. We have these in the UK. They're called Environmental Impact Assessments and are a main part of the hated Home Information Packs. They cost hundreds of pounds to get and virtually nobody reads them.

[Crimson_Sky]

I think this is a good idea.

Even just for the fact it could help protect some people from going into serious debt because their home ended up costing a lot more than they expected.

I'd like to see this in Canada, too. :)

[Paul D]

Scott

Would you believe it, your idea was not original!!

In the UK, homes must be evaluated for energy efficiency before they can be sold. Moreover, prospective buyers are told what the energy rating currently is and what it could be if action were taken (installing loft insulation etc.). It costs the seller to get the information, but it seems to be working ok since the scheme became law sometime last year.

Any chance something similar could come in in the US?

[msl]

Sounds great, but it needs to include number of occupants as part of it. One person vs. six makes a huge difference in the utilities used to maintain a home. And retired people need air conditioning and heat 24/7, vs. a working family who use a programmable thermostat. But the concept is pretty good. Here you need to be able to provide a year's worth of the utility payments for buyers when you sell your home (realtors ask for it) but it'd be nice if there was a great formula that would calculate the utility quotient per person for your house.