Business Development Resources
Defining Your Services
What are you selling?
If is vital that you are able to clearly define and communicate to
potential customers what it is you are selling. This is easier said than
done. First, take a few minutes to capture in a few words what it is
that you do. These definitions will of course change with the customer.
Here are just a few examples of definitions of rating services used by
raters across the nation:
- Applied Building Science Diagnostics
- Verification for ENERGY STAR
- Verification for the Tax Credit
- EEM Inspections
- Access to Preferred Financing
- Identification of Cost-Effective Improvements
- Healthier Living Environment
- Solutions for Added Homeowner Comfort
- Builder/Buyer Quality Assurance
Any effective marketing strategy will define the value of your
services to your customers.
By considering the value of your rating services to your various
customers you will be able to tell your story more effectively.
As a starting point the following are potential benefits of ratings
to builders, lenders, marketing agents and consumers:
Benefits of Ratings to Builders
- Tap the Growing Market Trend Toward More Energy Efficient Homes
Across the nation there is a growing consumer demand for high
performance, energy efficient homes. This growing market demand is
best illustrated by the fact that in 2002, 3% of all new homes built
met the ENERGY STAR Homes standard.
Another illustration of the potential market power of homes that are
rated to be energy efficient is a consumer survey completed by Pulte
Homes in Tucson, Arizona. The Pulte study found that 88% of the
consumers who purchased Pulte ENERGY STAR Homes listed the energy
features of the home as important in their decision making. Click on
Pulte Homes Market Survey.
- Present the Energy Efficient Builder the Opportunity to
Differentiate Their Product Through Marketing of the Energy Efficient
Features
A home energy rating provides proof for a builder to demonstrate the
energy efficiency of the home through an independent on-site
inspection by a qualified building performance professional - a home
energy rater. The energy efficient builder can differentiate his homes
in the market place through this verification.
- Increase the Buying Power of Consumers
An energy efficient mortgage increases the buying power of consumers
purchasing an energy efficient home by crediting the home’s energy
savings in the loan qualification process and the home’s appraised
value. This not only increases the number of families able to afford a
home but also allows consumers to afford more of a home. A home energy
rating is the key that unlocks the access to an energy efficient
mortgage.
- Demonstrate Good Corporate Citizenship by Enhancing the Quality
of the Environment and National Security
Responsible builders like to be perceived as responsible corporate
citizens in their community. The energy we use in our homes is
responsible for a large portion of pollution caused in this nation. In
addition, the large amount of oil imported to our nation from the
volatile Middle East raises serious national security concerns. An
energy efficient home reduces pollution and the demand for Middle
Eastern oil. Builders can demonstrate their corporate responsibility
by building and marketing energy efficient homes.
For more information on the benefits of home energy ratings to
builders click on Energy
Rated Homes.
Benefits of Ratings to Lenders
- Qualify more first time home buyers for mortgage loans
Having enough money for a down payment is a major barrier to home
ownership for many families. The energy mortgage addresses this
problem through crediting a home’s energy savings in the loan
qualification process. The new Fannie Mae My Community Energy
Efficient Mortgage product offers 100% Loan-to-Value and only $500 in
closing costs. Analysis by the Environmental Protection Agency
projects that an average of 6.8% more families would be able to
qualify for a mortgage through an energy efficient mortgage.
- Reduce the cost of home ownership
The cost of heating and cooling a home is the highest cost of
housing outside of the mortgage loan. The impact of energy costs
presents a special burden to lower income families. Fannie Mae
estimates that low income families spend an average of 19% of their
annual income on energy bills. Energy efficiency reduces this burden
thus freeing more money for housing.
- Participate in energy mortgage programs
Energy mortgages increases a consumer’s home buying power by
crediting the monthly energy savings in the mortgage. All energy
mortgage programs require a home energy rating to estimate the savings
and verify the home’s energy efficiency. The Fannie Mae energy
mortgage product is underwritten in the Desk Top Underwriting
automated loan processing program. The rating report provides all of
the information a lender needs to underwrite the loan.
- Determine the relative energy efficiency of the home being
financed
The energy rating presents information on the energy efficiency of
a home in non-technical and easily understood terms (the star rating).
This will allow a lender to know at a quick glance the relative energy
efficiency of a home. The rating will tell if the home meets the
minimum energy code (4 Stars) or meets the ENERGY STAR Homes standard
(5 Stars).
- Increase confidence in the home's marketability in case of
default
Of vital concern to mortgage to the marketability of a home if the
loan goes into default and the lender must foreclose the home. A
lender should feel more confident financing a home that has been
verified as energy efficient by a rating because it will be more
marketable. In addition more families would be qualified to purchase
the home through a energy mortgage.
- Receive Community Reinvestment Act credits
Congress requires that lenders target a certain percentage of
their loans to meet the needs of low income and minority families (the
Community Reinvestment Act - CRA). A lender must receive a set amount
of CRA credits to keep their license. The Federal Home Loan Bank sets
the policy for the issuing of CRA credits. The Federal Home Loan Bank
has ruled that energy mortgages targeted to low income and first-time
buyers qualify as CRA credits.
- Reduce America’s dependence on imported oil and aid the
environment
A mortgage lending firm can differentiate their business as
responsible corporate citizens by promoting energy efficiency housing
that not only fosters more affordable housing to more families but
also addresses the national concerns over the environment and national
security.
Benefits of Ratings to Marketing Agents
- Have a larger pool of potential buyers who can afford more of a
home
An energy efficient mortgage increases the buying power of
consumers through crediting the energy savings of a high performance
energy efficient home documented through an energy rating into the
mortgage loan. An energy efficient mortgage will not only qualify more
families for a mortgage loan but will allow a home buyer to afford
more features in a home than they would have otherwise.
- Present information on the energy efficiency of a home in
non-technical and easily understood terms
The energy rating presents information on the energy efficiency of
a home in non-technical and easily understood terms (the star rating).
This will allow a lender to know at a quick glance the relative energy
efficiency of a home. The rating will tell if the home meets the
minimum energy code (4 Stars) or meets the ENERGY STAR Homes standard
(5 Stars).
- Market the energy efficient features of the homes they are
selling
Presenting information on the energy efficiency of the home in
non-technical terms allows marketing agents to market the energy
efficiency of the home in terms that a consumer can readily
understand.
- Mitigate the lower selling price of inefficient, existing homes
through energy improvement mortgages
In most cases when a home needs repairs such as a new heating or
air conditioning system either the seller has to make the improvements
prior to closing or the seller has to reduce the price of the home. An
energy improvement mortgage presents a real estate agent with a
solution to the problem. The agent can market the energy improvement
mortgage to the prospective buyer as a way to finance the energy
improvements in the mortgage loan without additional loan
qualification or, in most cases, without any additional money down.
Benefits of Ratings to Consumers
- Determine the relative energy efficiency of a residence when
purchasing a home
Many of the energy efficient features of a home are hidden once
the dry wall goes up and it is difficult for a consumer to know the
energy efficiency of a home. A home energy rating involving diagnostic
testing, will give a home buyer a third party verification of the
home’s energy efficiency.
- Make educated decisions when investing in cost-effective energy
improvements to the home
Besides providing a rating of the home and projecting its energy
costs, a home energy rating provides a home owner with a listing of
cost-effective energy improvements for the home and the economic
return on investment from making those improvements.
- Add the cost of making the energy improvements to the mortgage
loan through an energy improvement mortgage
An energy improvement mortgage will finance the energy
improvements recommended by an energy rating as being cost-effective
into the mortgage loan at the time of the purchase or during
refinancing. An energy improvement mortgage does not require any
additional qualification and in most cases does not require any
additional money down. Mortgage interest terms are much more
attractive than credit card or consumer loans.
- Qualify for a higher quality, energy efficient home
An energy efficient mortgage increases the buying power of
consumers through crediting the energy savings of a high performance
energy efficient home documented through an energy rating into the
mortgage loan. An energy efficient mortgage will not only qualify more
families for a mortgage loan but will allow a home buyer to afford
more features in a home than they would otherwise.
Market Considerations
What is going on in your market?
The second step is getting to know your potential market.
The following is a short list of market considerations to keep in
mind:
- Current Building Practices
- Characteristics of Builders
- Robustness of the Housing Market
- Demographics of Buyers
- Rate of Homeownership/Housing Costs
- Cost of Energy
- Common Building Problems
- Availability of Utility Programs
Know Your Potential Customers
Learning as much as you can about your potential customer’s
motivations and needs, will pay big dividends in the future. Based on
your knowledge, you can better tailor your message to them. Depending on
your market, there are many ways to obtain information about them. Here
are just a few examples to get you thinking:
- Study potential customer’s web sites
- Google potential customers to see if they have been features in
any recent publications
- Where did they start and where are they going?
- Research whether their sales are up or down
- Find out if they have problems with warranty calls
- Dig for information on what their company aspirations are
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