The more things change

Despite the supposed sweeping changes to the real estate industry and the trade organizations (who insist they are ultra responsive to the best interests of the members and the public) some things stay the same. For example, the resistance of state and national real estate trade organizations to ANY point of sale (POS) requirements. This despite an increasingly obvious need to use any and all means available to reduce Green House Gas emissions thereby increasing the time our planet can support human habitats. This doctrinaire anti-POS stance has a long history, but there are benefits to POS triggers in terms of achieving change in a large number of houses every year. The trade organizations argue that POS only involves houses sold so it's unfair, discriminatory and requires excessive time to affect change in all houses. All those arguments are valid, BUT they ignore the benefit, cost, consequences and alternatives test. What are the benefits (and to whom do they accrue), what are the costs (and to whom do they accrue), what are the consequences of not doing POS and what are the alternatives?

Housing accounts for between 20-30% of energy use in the US (depending on severity of climate and other factors). If POS measures are removed from consideration, what incentives or mandates will replace that potential energy savings, what entity will create and implement them and who will pay the immediate financial costs in order to extend the ability of the planet to support humans in a lifestyle of reasonable quality?

These are big questions not answered thus far by the State or Federal Governments or by real estate trade organizations. The faithful among the trade organization leadership and executive staff insist that opposition to POS is sacrosanct and that developing alternative energy savings is not the problem of the real estate industry or the trade organizations--ie it's not real estate related. It's merely planet related!

Consider for a moment the perspective of the Sellers and Buyers. For whatever combination of reasons Sellers fail to upgrade their houses to keep pace with improving energy efficiencies. If they then elect to sell, they may do so because of financial hardship, but they may also be seeking to tap equity build-up to make a significant profit from the sale. Is it reasonable for Sellers to experience no burden or responsibility at point of sale for electing to pass on upgrades to energy efficiency features. Should they also be exempt from providing an energy audit report for the Buyer's review before they establish a value and make an offer on a property? The Sellers made the decision not to upgrade--that's their right. Sellers may neglect septic systems or pest control measures, but those are traditionally addressed at time of sale. They aren't required, but standards of practice dictate that the Seller has a responsibility to at least provide reports. The anti POS policy means Sellers and the real estate brokers want to pass the consequence of past decisions regarding energy use onto the Buyers without hindrance or consequences. The Buyers are paying the Sellers for the house, paying the commissions to the brokers and they are going to be living in the house and experiencing higher energy costs because of any lack of energy efficiency. The planet (and inhabitants) will suffer from higher GHG emissions and accelerated climate change. Put simply, does the seller's (and broker's) ability to experience a smooth sale with a minimum of expense or complication take precedence over the other stakeholder ranging from Buyers to the planet? The real estate industry and the trade organizations would shout "most definitely"!

The United Kingdom requires a Home Inspection Package for every house sold, which includes an energy audit, home inspection, pest report and various other documents. Every Buyer knows the energy efficiency of every house he or she looks at. That won't happen in the US because the trade organizations perceive that complications could arise that would negatively affect the volume and ease of transactions. The "estate agent" trade organization in the UK is not as powerful as trade organizations in the US--you probably guessed that already. European countries are far ahead of the US in the level of understanding of climate change--some of that difference may be attributable to the way real estate is developed, sold and resold in the US. Lobbying is a well financed art in the US--where there are sufficient PAC funds, there's generally a way to look the other way.

Remember, the real estate industry measures success in terms of gross closed commissions, not the quality of the services rendered. You'll never hear a broker or an agent boast about what outstanding service they provided at the end of the year or how much they raised the awareness of the public. The boasting is all about the money.

Without delving deeply into politics, it is interesting to note that the Republican National Committee remains unconvinced that climate change due to GHG emissions is even a reality. The real estate trade organizations are caught in a tough position. They tend to be aligned with Republican principles, but at present Republicans are a minority party and polls indicate a majority of the public (remember them?) do believe climate change is real and that greenhouse gas emission of human origin played a substantive part in creating it.

The diverse "green programs and education" sponsored by the trade organizations reflect a delicately crafted effort to exhibit sincere concern for the planet while staying far away from the faint suggestion that POS might be involved in any energy conservation effort. These PR efforts are working well. There are few comments in the media about how much MORE the real estate industry could do to encourage reduced GHG emissions. Think about it, real estate professionals are in contact with millions of homes and millions of homeowners and future homeowners every year. How much effort is actually made to change lifestyle patterns and encourage energy efficiency upgrades during those contacts? Very little. For every "green seminar" there are a multitude of offerings focused on "success", ie closing as many transactions as possible while minimizing risk, regardless of the market, environmental concerns or anything else. Facilitating smooth and profitable transactions remains the ever present primary goal of the industry and the trade organizations. Reducing GHG emissions is diverted to incentive plans, rebates and tax breaks far outside the quest to maximize profitability that fuels the real estate industry. Unfortuneatley, those voluntary programs don't make a very large ripple in the turbulent ocean of excessive energy use. The fact that the US lags far behind most European countries in lowering energy use may be tied to the major political power of the US real estate industry.

Does the real estate industry represent an important part of society and its all too slow evolution toward a more sustainable lifestyle? Alternatively, it may just represent another a sales industry. Is a car sales person a fiduciary? The public doesn't expect that level of representation. Do car sales persons carefully review the energy costs of the various models? Regardless of what they do, the mileage figures are placed on every new vehicle and gas guzzler taxes are levied on the powerful ego machines. The public doesn't get energy use figures on houses. Appliances, yes, cars yes, but not houses. Is it in the best interests of Buyers and Sellers to pay so slight attention to energy efficiencies in housing given the potential economic and environmental costs? Until Buyers are better educated about the benefits of energy efficient homes and green materials/features there's little financial incentive for Sellers or Developers or the real estate industry to go green. The real estate industry could be pivotal in raising awareness among Buyers, but it hasn't been, driven, in part, by fear of collateral effects arising from the knee jerk anti POS stance dating back 30+ years.

One thing is certain. Mother Nature is the final judge of humanity and the real estate industry, along with its trade organizations. The planet can't be lobbied, schmoozed, wined and dined or bought off with campaign contributions. Smooth transactions and unhindered flow of commissions seem attractive in the short term, but longer term questions concerning the fate of the planet as a human habitat warrant serious consideration by all mankind, even Realtors and their trade organizations.