So you’ve started shopping for a new home. Maybe you’re upgrading from an apartment to that very first single-family residence, or perhaps you’re looking to buy a larger home. While the monthly cost of that mortgage payment is certainly your biggest financial concern when preparing to buy a house, don’t overlook the other expenses that come with homeownership, one of which is utility costs.
In 2019, the average American spent six cents per square foot on energy costs or approximately $115 per month for an average 1,789-square-foot house. But estimating energy costs on square footage is a gamble given all the factors that go into determining whether or not a house is energy efficient. For example, its geographic location and how well it’s insulated.
How do you estimate energy costs for a home you don’t live in yet? We’ve got some tips to help you evaluate how costly (or not) that new house will be to operate, as well as how you might bring some of those costs down.
Ask for copies of utility bills
If you’re feeling pretty serious about making an offer on a house, ask for copies of utility bills over the course of the past 12 months (electric, natural gas, water). Your real estate agent can also make a request through the seller’s agent. If it’s a For Sale By Owner property, ask the owners directly. Most sellers are happy to comply if it means they might sell their home to you.
Request a home energy audit
Hire a home energy auditor to evaluate the home’s energy efficiency and, thus, provide you an idea of what it will cost to heat and cool. The lower the residence’s Home Energy Rating System score, the more energy-efficient the home. A new house built to building codes should have a score of 100. An older home might have a bit higher score, but, generally speaking, you’ll want to see a HERS score below 130.
You can often get a referral to a home energy auditor through your local power company. Dominion Energy, for example, can refer you to a home energy auditor.
Evaluate the home for potential energy drains
Sometimes a careful visual inspection of a listed home can give you clues about potential energy drains. For example, homes with high cathedral ceilings are going to cost more to heat and cool because they draw conditioned air away from the spaces at floor level where you actually spend your time. Similarly, a compact multi-level house will be cheaper to heat and cool than a sprawling one-story ranch house of the same square footage.
Be sure to also check for:
- Older plumbing fixtures that weren’t built or installed with water conservation in mind
- Keep an eye out for landscaping that looks like it may have high irrigation needs
- Note any older, less energy-efficient appliances like stoves or refrigerators that will use more electricity than new models.
Check for potential energy savers, too
Note the SEER ratings on the home’s HVAC system(s). The higher the rating, the more energy-efficient its heating and cooling systems and the cheaper to operate. Also check the Energy Guide labels on appliances like water heaters, washers and dryers, and other large home appliances. These will often tell you how many kilowatt-hours per year an appliance uses. Energy Star-certified appliances are also 10% to 20% more efficient than non-rated versions. New windows (or replacement windows in an older home), tankless water heaters, and ceiling fans also make a home more energy-efficient and keep those utility bills lower.
However you choose to estimate home energy costs for that new house, just make sure you consider operational costs in your purchase budget. This is especially true if you’re a first-time homebuyer and you’ve grown accustomed to utilities being included in your housing rental rates.
Ready to start looking for that new home and applying for a mortgage? Our team of expert OVM Financial loan officers is here to help. Give us a call, or start your application online.
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