Creating a Greener MLS

Implementing green features on your market's multiple-listing service might seem like a daunting proposition, but it's probably not as difficult or time-consuming as you think.

April 1, 2011

Rising energy prices, consumers feeling pinched at the gas pump, and an aging, inefficient housing stock all create a compelling case for making sustainable housing choices a priority.

Federal, state, and local governments have taken notice of the cultural shift toward sustainability and have spread incentives to improve buildings’ efficiency and diminish the country’s dependence on nonrenewable energy sources.

Given such business and lifestyle shifts, real estate practitioners and others in the building industry have been teaming up to green their multiple listing services. It’s a smart business decision.

Why Green?

A green MLS offers benefits to numerous constituents:

  • Home owners can get credit for green features they’ve added, and consumers seeking green features or certifications can find such properties.
  • Appraisers gain a well of data to tap for apples-to-apples comparisons and to better value green features and generate legitimate comparables.
  • Real estate practitioners can use their green expertise for branding and marketing and to establish themselves as the local go-to green agent. Also, green data can be aggregated to show market trends, such as time on the market and sale- to list-price ratios for green homes versus conventionally built ones.
  • Builders can identify and deliver green features that are in demand, and they can get credit for strategies they’ve implemented.

The long-term result could be a dynamic tool that caters to consumer and industry demands.

“Data generated from early-adopter green MLSs show buyers have a preference toward certified green homes,” says Al Medina, GREEN, LEED AP, NAR’s Green Designation director. “When we see more of this data from MLSs across the country, it will further justify the advantages of certified green homes and act as a demand catalyst.”

Green homes, after all, represent a growing part of the market, and NAR’s Green REsource Council anticipates demand for such properties to grow. In addition, statistics from several MLSs make a compelling case for the other market advantages that certified green houses have.

In Portland, Ore., for instance, 14 percent of homes on the market between mid-2007 to -2008 were green. By mid-2010, that figure grew to 23 percent. And between mid-2008 and mid-2009, Portland’s green properties sold 18 days faster than their non-green competitors.

In Atlanta, certified green homes sold 15 days faster than traditionally built new homes during 2010. In 2009, that number was 31 days. Certified green homes in Atlanta have also seen a year-to-year increase in market share of total homes sold.

A way to ensure that the industry is prepared for this greater demand is by making it simpler to find, promote, and evaluate green homes. It’s probably why the effort to green MLSs around the country is gaining steam, and building professionals are establishing cross-functional teams to plan and execute green MLSs.

A GRC and NeighborWorks survey of MLS operators conducted in late 2010 indicates that 13 percent of respondents (73 percent of all MLSs participated in the survey) have some level of searchable green fields in the MLS system. Eleven percent are at some point of implementation. And MLSs aren’t just getting greener in hotspots like Portland. They’ve also added green features in places like Goshen, Ind., Fairbanks, Ala., and Peoria, Ill.

Getting Started

If you’re involved in greening your MLS or want to be, industry research, the green MLS toolkit, and insights from those who have undertaken similar initiatives all offer ways to streamline the process and overcome obstacles.

They also shed light on three vital components — regular communication of upcoming changes to all stakeholders, green education, and having a process in place to ensure green claims in listings are accurate.

Proposing, planning, and implementing a green MLS is likely to be less time-consuming than you’d guess. Thirty-five percent of those surveyed said it required one to four months. Only 1 percent of GRC survey respondents said it took more than 12 months. Much of the time spent on greening an MLS should be dedicated to ensuring the integrity of the data.

“Green fields that aren’t backed up with some kind of certificate carry the risk of greenwashing or errors,” says Laura Reedy Stukel, GREEN, consultant for Center for Neighborhood Technology/Energy, and an agent with L.W. Reedy Real Estate, Elmhurst, Ill., who was involved with greening Chicago’s MLS.

It’s critical for MLS boards to create policies that combat risk and greenwashing. There are a couple of effective approaches.

The Traverse Area Association of REALTORS®, Traverse City, Mich., for instance, reviews each listing to ensure that greenwashing isn’t taking place. And the Phoenix MLS requires an upload of supporting documentation within four days of placing a listing containing green claims. Without such proof, listings are deactivated.

Other MLS systems are following the example set by Traverse City and Phoenix because these policies mitigate risk, minimize potential for greenwashing, and ensure good data.

Closely linked with ensuring data integrity is member education. After all, most greenwashing is unintentional, experts say. Some non-green agents, for instance, may check off that a house has the Energy Star certification, even if a house has only an Energy Star dishwasher.

But whether it’s intentional or not, erroneous green information taints the data and compromises the legitimacy of all green properties in the MLS. And while it’s beneficial for agents to have the technical know-how to maneuver around a green MLS, the most effective training is a green certification program such as NAR’s Green Designation, Medina says.

Factors to Consider

The level of adoption and the number and type of green fields needs to be tailored to local needs.

For instance, given that there are few LEED-certified properties in her market, Tracy Huotari, CEO of the Duluth Area Association of REALTORS® in Duluth, Minn., intends to focus on practical items such as energy-efficient windows when its MLS committee starts looking at greening the system later this year.

Julie Alert, association executive of the Elkhart County Board of REALTORS® in Goshen, Ind., says, “We picked things that made sense for us — windows and doors, green certifications, and energy-efficient appliances — and that would give us the most bang.”

Including fields that give home owners credit in the MLS for green upgrades they’ve done also is key. “Lots of people made green improvements and are getting nothing back on it,” Stukel explains. Throughout the planning and implementation phases, she suggests ensuring that the green MLS will serve as an appraisal tool.

Appraisers need to be confident that they’re seeing legitimate green features, and they have to be able to clearly differentiate between green and non-green properties. After all, if they don’t have comps for something, then they can’t put a value on it. And both appraisers and lenders need to see value before they’ll factor green features into their decision making.

Given that green standards and certifications will evolve, many view the MLS updates as works in progress that should be reviewed annually to be sure they remain dynamic and reflect current thinking and technology. That ongoing tweaking is likely to lead to a green MLS that evolves into a tool that has greater value to the real estate industry and to consumers.

Elyse Umlauf-Garneau is a Chicago-based freelance writer and former senior editor with REALTOR® Magazine.