Mandatory home energy audits are a bad idea for Nevada

I'm responding to the "My Voice" opinion article of Jan. 17, 2011, written by Leon Mills. As an opinion piece, the column contained lots of good points and seemed well intentioned. Certainly, no one could disagree that we all need to move forward toward a more energy efficient state and nation.

However, Mr. Mills took a great deal of liberty in his representation of the 2007 state law (Senate Bill 437) by stating that the intent was to mandate energy audits upon the sale of homes in Nevada. The Nevada Association of Realtors spent countless hours working with legislators and testifying at those 2007 hearings about the dangers of including "mandatory energy audits" or any type of home rating system within the final draft of that law. In the end, it is far more accurate to say that the legislative intent of that bill was to have sellers provide buyers with an energy evaluation of the property.

Here's why this is important. The Nevada housing market is the worst in the nation. We lead in foreclosures per capita and most markets are tremendously under valued. If we wanted to put another nail in the coffin of the housing market, we could do so by mandating energy audits. If you force a seller to pay for a full blown energy audit (typically $350-$600 as Mr. Mills points out), that alone adds another huge cost to sellers who are already hurting, and in many cases have no equity in the property they are selling. But, that's just the tip of the iceberg. Once the energy audit is presented to the buyer, in most cases the buyer would ask for hundreds, if not thousands, of dollars in retrofits and upgrades, based on the audits' findings. Buyers would be asking for new windows, a new furnace, etc. As a result, many transactions would crash and burn. Furthermore, if the bill had passed as first introduced, thousands of older homes in the state would have been stigmatized by a rating system. Older homes were not built with the energy efficient features of today's construction, so they would receive low ratings and become nearly impossible to sell at market value.

In the state of Nevada there are no mandated inspections required to sell a home. We strongly urge buyers to obtain structural and pest inspections, as well as inspections for many other things, like roof, well, septic, etc. But, these are options....not mandates.

The Nevada Association of Realtors, along with the National Association of Realtors strongly supports "voluntary" efforts aimed at achieving greater energy efficiency. The key word is voluntary. We are very strongly opposed to any attempt to mandate energy audits or anything else that could adversely impact the housing market in this state or nation. Our Realtor members are very vigilant in educating their buyers as to the value of various inspections, and in most home sales buyers do choose to pay for, or ask for, these various inspections. Again, the key word being "choice."

Finally, while I applaud Mr. Mills' passion for his industry, I must point out that SB437 was enacted to give home buyers a "history" of the energy use and costs by the current residents of the home and was not intended to mandate energy audits.

Rob Wigton is chief executive officer of the Nevada Association of Realtors. Contact him through www.nvar.org.