Step 1 -Establish the Business Case
Goals and Objectives
Early adopters of green MLS have found that this is a topic that crosses many industries. From builders and remodelers to real estate agents and appraisers, high-performance homes are changing the housing inventory and creating new demands upon the real estate transaction. Regardless of industry, deploying green MLS fields becomes a common objective that unites various professionals in the shared goal of fair value for high performance homes as shown in the figure below.
The benefits of green MLS are inspiring – both in terms of supporting consumers to fairly find and sell high-performance homes, and in the good these homes do for our planet.
However, any MLS field implementation project has costs in terms of time and money and green MLS development is no different. So a business case is essential.
The business case should be built on the assumption that green MLS requirements will be defined by beginning with industry-standard green MLS fields that are already described in the Real Estate Technology Standard Data Dictionary as defined in Step 3 of this Toolkit. Starting with RETS-compliant fields ensures consistent data. It also improves the business case because it creates an opportunity to reduce planning and design time by working with vetted fields that MLS system software vendors are likely to have previous experience in deploying.
Defining the Business Case
Because there are costs involved, it is essential that any stakeholder group interested in advocating for green MLS fields starts by understanding the business case for such fields. The business case will help an MLS prioritize when to invest in green MLS fields and plan implementation when there is enough supply of homes to utilize fields. No one benefits from fields that are built and not used. In addition, under-used fields are much more likely to be used incorrectly.
See Why an MLS with Green Fields? section of this toolkit for stats on the growing demand and supply of green homes.
Sample Business Case Questions:
• How many new high-performance homes are being built in the MLS coverage area right now? How many have been built to date?
• How many existing homes have been remodeled for better resource and energy efficiency?
• What are the predominant third-party verification programs used in our market? Are there utility or non-profit organizations offering access to trained professionals a recommended path or even financing to encourage more home upgrades?
• Are codes, incentives and/or consumer expectations changing that will increase the number of new and remodeled homes in our inventory? How fast might this number be growing?
• What are the predominant building methods and features of these homes? What methods and features are most effective in our local climate?
Knowing the answers to business case questions like the ones listed above may also help stakeholder groups identify grant funding sources to accelerate green MLS work. For example, in markets where building codes are changing significantly to accelerate energy efficient design there may be few high-performance homes available today, but a very high number in just a few years. The business case analysis may indicate that grant funds are needed to advance green MLS proactively ahead of this inventory shift.
The case study on green MLS implementation in the state of Colorado provides a successful example of how grant funding can accelerate green MLS as a priority, just before an inventory shift towards high performance homes occurs.
Some strategic questions to consider before starting the green process include:
1. How does a greening effort fit with the organization's strategic and budget plan? Make sure the Board of Directors understands the effect of a green MLS initiative on planning and budgeting.
2. What has the software system vendor for our MLS already learned about green MLS implementation? What can we learn about fields that are already successfully deployed in their other MLS client areas?
3. How does this effort fits with any plans to adopt the RETS Data Dictionary? (Green fields are included in the Data Dictionary so a separate Green MLS implementation would duplicate work.)
4. How does this effort fit with other strategies and objectives?
Assembling the Team
As described in the image above, green MLS is an objective that helps various stakeholder industries work toward the common goal of fair value for high-performance homes. A representative team can build an effective business case for green MLS projects, and ensure that all the steps in this Toolkit are effectively planned and implemented. This means focusing beyond just deploying the technology to ensuring a supportive market that encourages full usage of these fields. Essential commitments include cross-industry plans for documenting high-performance homes (Step 2), training and communications across all the industries (Step 5), and inventory reports showing trends in local supply of high-performance homes (Step 6).
• Your MLS software system vendor likely has access to green MLS fields identified in the RETS data dictionary as well as some experience knowing what works based on deploying green fields for other MLS clients
• Identify appraisers via Appraisal Institute Valuation of Sustainable Buildings Registry; or, appraisal organizations including the Appraisal Institute have a list of their chapters
• Mortgage Bankers Association provides a list of their state and local associations
The building and remodeling industry has long been a willing advocate of green MLS work and can be easy to identify in your community. Builders and contractors and architects are at the front-end with insights for your business case based an understanding of shifts in the local housing inventory towards high-performance homes.
• National Association of Home Builders provides a local building associations directory. The network of energy efficiency remodel programs and businesses is more diverse, but are becoming increasingly organized.
• Elevate Energy and The National Home Performance Council published a paper to encourage energy efficiency remodeling programs across the country to understand the importance of RETS-compliant green MLS design.
• Members of the National Association of State Energy Officials are usually connected to organizations and initiatives that drive energy efficient codes, incentives and other programs to increase the supply of energy efficient housing.
• Home Performance with Energy Star program sponsors cover over 35 states.
• Efficiency First chapters represent local small business owners that offer energy efficient remodeling.
Having stakeholders with different levels of expertise and knowledge tend to enrich the spirit of the team, and the strategy can forge strong bonds between your organization and like-minded professionals to ensure that green MLS is deployed in a supportive market environment that will encourage the impact of green fields both inside and outside the MLS’s membership.
The toolkit's case studies indicate that the green champion in each situation brought together decision makers from the MLS, green home builders, green building consultants, architects, and real estate licensees. Such professionals tend to be knowledgeable about the market, the types of homes being built, and the features being incorporated into properties. Having a well-rounded team, that represents the green building and sales industry as a whole, helps to ensure that the needs of each segment are met.
Next: Step 2 - Manage Risks