Is Chicago's home-seller energy disclosure law effective? Real estate agents weigh in
It’s been one year since Chicago became the first major U.S. city to require home sellers to disclose their energy costs in listings.
The measure, which was instituted to help home buyers make better buying decisions, mandates sellers disclose annual and monthly gas and electric costs on the Multiple Listing Service used by real estate agents.
What the actual effect this new disclosure law is having on the local housing market is a matter of debate among some Chicago agents, however.
Energy disclosures sell homes
Laura Reedy Stukel, a Realtor with highly rated LW Reedy Real Estate in suburban Elmhurst, Illinois, wrote in a recent report that preliminary data shows homes with gas and electric disclosures sold faster.
In announcing the initiative last July, Mayor Rahm Emanuel’s office cited a 2013 National Association of Homebuilders study that showed “energy efficient homes are desired by a vast majority of consumers.”
Energy costs 'low on the list'
While it’s hard to dispute many of today’s buyers demand energy efficient homes, one Chicago buyer's agent has doubts that buyers are too concerned about those costs in today’s competitive city market.
“Energy bills are pretty low on list nowadays,” says Jeff Kropp of highly rated The Home Buyers Agents in Chicago. “… Now that supply of homes has been super tight for a year now, buyers move quickly when they see a home they like and often face fierce competition from other bidders. As a result, the energy question might be asked, if at all, later in the process after the home is under contract.”
Kropp also questions whether most agents working in the city are even aware of the disclosure requirement, let alone following it.
“Most listings don't have the disclosure, meaning agents don't know the law or don't care," he says. “I surveyed 10 random Chicago listings and only three had energy disclosure.”
Buyers' needs differ
Highly rated real estate broker Dominic Irpino with Irprino Real Estate in Chicago says the mandate isn’t exactly a “new concept,” as he already was providing the data to most buyers. He suggests that interest in energy cost depends mostly on the type of property.
“For condo buyers, they are less interested in energy costs given the shared walls and insulation,” Irpino says. “Single-family home buyers are more interested in energy costs as they could vary greatly.”