Four Tips to Save Money on Energy and Make Your Home More Attractive to Buyers

It's no secret that it's a buyer's market right now.

While a few cities like Seattle and Austin arecurrently experiencing relatively strong growth, most housing markets are still struggling to recover from the 2008 collapse. But as energy costs have risen steadily over the last decade--with no end in sight-- making a home more energy efficient could give sellers an edge. However, many of these upgrades aren't cheap, and experts say not all the green improvements are worth the added expense.

Where Does Your Money Go?

According to Energy Star, the average American family spends approximately $2,200 per year on utilities. But where does all that money go? Heating costs account for the largest chunk of the pie, encompassing 29% of total utilities expenses. Air conditioning costs account for 17%, water heating eats up 14%, and appliances (such as the refrigerator, washer, and dryer) account for 13%. The remainder is spent on electric appliances, such as the TV, computer, and lighting.

Practical Energy Upgrades

Homeowners looking to save money should focus their efforts on the areas that use up the most utility dollars, mainly upgrades that affect heating and cooling costs. An added bonus is that sometimes these upgrades will also improve the value of your home.

1. Upgrade to a New Furnace "Energy efficient furnaces are a very attractive item for energy savings and for resale," says Linda Barnwell, a certified ecobroker withKeller Williams."Airtight homes that are caulked well and have a roof in good condition really help with the savings and for resale. These upgrades are all worthwhile, and they're features that buyers are looking for too."

Since heating makes up the biggest chunk of your energy expenditures, it makes sense that upgrading here will make the most impact on reducing utility costs. Energy Star rated furnaces are reportedly 16% more efficient on average, and will save an average of $96 per year in energy costs.

Although a new furnace won't necessarily increase your home's value, experts say the upgrade could make your home more appealing to potential buyers. Installing a new furnace isn't cheap, and you should expect to spend $5,000 to $8,000. Experts advise shopping around and getting several quotes. You can also save money by purchasing your furnace directly from the manufacturer and then hiring a good contractor to install it for you--this skips adding the contractor's markup on the furnace.

It's important to keep in mind that although a new furnace won't add to your resale value, it will make it more appealing to buyers. If you're trying to sell your home with a furnace that's 20 or 30 years old, most buyers will insist it be replaced before they move in, or they'll ask for additional money off the sale price so they can replace it themselves. Putting in a new furnace might lead to a quicker sale, which save several months of mortgage payments and reduces the amount of time the house sits on the market.

Read the rest here:
Four Tips to Save Money on Energy and Make Your Home More Attractive to Buyers