Greening Bank-Owned Homes
What are some cost-effective, realistic green elements banks could incorporate into their typical REO (Real Estate Owned) program?
Before a bank puts a foreclosed property back on the market, typically the bank does some bare-bones repairs on the property. What if, instead of doing the bare minimum, the bank decided to look at the foreclosed property as a challenge and opportunity?
While I completely understand the economies of scale in which banks operate — and that most appraisers don’t recognize green improvements as a true value added in the appraisal value of a home — I think this is the most opportune time for banks to re-examine their process. I mean, honestly, it’s not like properties are selling quickly in this market — and what if the properties started selling faster because of the newly, bank-added green elements in the homes? So, if I were a bank and couldn’t do a full green rehab, here is what I would do…
The Quick and Easy
I would focus on the easiest and quickest things to change that would have the greatest impact. I would examine my typical process and then find a green alternative to each of the steps along the way. For example:
Typical Steps in Prep Process
1) New Carpet
3) Professional Cleaning
New Green Process
1) Laminate hardwood floors installed using low-VOC adhesives/sealants. If carpet is a “must have,” use carpet, padding and adhesives that are Carpet and Rug Institute’s Green Label certified. Do not install carpet in basements, bathrooms and laundry rooms — places where moisture problems are more likely to occur. Use resilient flooring.
2) Paint with no-VOC paints, using lead-safe standards.
3) Hire a cleaning crew who uses green cleaning supplies and techniques.
What if the former owner, or a home invader, busted all the toilets and stole all of the appliances? Look at this situation as an opportunity: replace the toilets with low-flow or dual-flush toilets and install Energy Star appliances.
Also instead of putting an unhealthy house back on the market for the next homeowner to have to deal with those issues, implement lead, mold and radon mitigation techniques prior to listing,
These are my thoughts… What are some thoughts you have on the subject? What else could banks do to cost effectively green their foreclosure stock?
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