EPA E NERGY S TAR Homes Sales Training

2 Before We Begin: -How Do You Sell Your Homes?

3 I. Background

4 Have You Seen This Label? The E NERGY S TAR Label is the new symbol for Energy Efficiency

5 EPA GreenLightsENERGY STAR Buildings 1990-Present1995-Present 8.0+ Billion sq. ft.2.5+Billion sq. ft. 1 in 11 buildings20-40% rate of return ENERGY STAR ComputersENERGY STAR Homes 1994-Present1995-Present 14+Million units1000+ Partners 100% of all manufactured10% of all homes by % of all homes by 2012 E NERGY S TAR ’s Track Record

6 What is the E NERGY S TAR Homes Program? - Voluntary -Single Threshold : 30% Greater than MEC -Third-Party Verification -Yes/No Consumer Decision -Significant Pollution Prevention

7 What Does the E NERGY S TAR Homes Program Offer Builder Partners? - Cost Advantage -Value Advantage -“Brand” Advantage

8 II. How Does E NERGY S TAR Homes Offer a Cost Advantage?

9 If you look at “Real” Cost, every product has three “sticker” prices: -First Cost -Operation Cost -Maintenance Cost Real Cost = Cost Advantage

10 First Cost: 10 Year Operational Cost: 10 Year Maintenance Cost: Total Cost: Real Cost Example: What does a light bulb really cost? Incandescent Bulb CFL $.50 $12.00 $60.00 $15.00 $3.50 $0.00 $64.00 $27.00 $64.00 $27.00

11 Pay Buyers to take them off your hands! Incandescent Annual Operation Cost:$6.00 CFL Annual Operation Cost:$1.50 Annual CFL Operation Cost Savings:$4.50 Annual CFL Credit Card Cost:$2.50 Annual CFL Cost: -$2.00 Final Cost of CFL: -$20.00 How to Sell the Real Cost of a Light Bulb

12 What is the “Real” Cost of an ENERGY STAR Home? Extra Sticker Price Extra Down Payment * Cash Back at Closing Extra Up-front Cost Additional Monthly Mortgage Monthly Energy Savings Extra Monthly Cost * 5% down payment ** ENERGY STAR Mortgage discount Standard E NERGY S TAR Home Home $ 0 $3,000 $ 0 $ 150 $ 0 $ 500 * $ 0 ($350) $ 0 ($350) $ 0 $ 20 $ 0 $ 35 $ 0 ($15) $ 0 ($15)

13 Preferred Terms with ENERGY STAR Mortgages -Discounted Closing Costs -Higher Qualifying Ratio -Assured Appraised Values -Free Interest Rate Lock -Discounted Interest Rates How Do E NERGY S TAR Homes Offer Lower Cost?

14 ENERGY STAR Mortgage Partners -Chase Manhattan Mortgage -Countrywide Mortgage -PHH Mortgage Services -FHA-EEM -Local Banks How Do E NERGY S TAR Homes Offer Lower Cost?

15 E NERGY S TAR Homes Sales Tools: ENERGY STAR Mortgages: Comparison Matrix

16 How Do E NERGY S TAR Homes Offer Lower Cost? E NERGY S TAR Homes Cost Sheet Simple Worksheet Demonstrating... -Real Cost vs. Sticker Price -Investment Return -Resale Value

 State-of-the-Art Technologies  Track Record of Low Utility Bills  E NERGY S TAR Home Label [E NERGY S TAR Builder] Model: [E NERGY S TAR Builder Name] Cost Sheet Other Builder Model: Net “Sticker Price” Down Payment Net Monthly Payment (____% Down) Minus Cash back* Net down payment Mortgage Payment Plus monthly utility bills Monthly Costs Rate-of-Return Resale Value -= - = -=  State-of-the-Art Technologies  Track Record of Low Utility Bills  E NERGY S TAR Home Label Monthly Cash Flow

18 How Do E NERGY S TAR Homes Offer Lower Cost? TABLE 1: Monthly Mortgage Cost

19 How Do E NERGY S TAR Homes Offer Lower Cost? Table 2: Investment Rate of Return

20 How Do E NERGY S TAR Homes Offer Lower Cost? E NERGY S TAR Homes Cost Sheet Example One: Sticker Price: Percent Down: Length of Loan: Mortgage: Interest Rate: Monthly Utility Bills: Competitor Quality Homes $170,000 $173,000 5% 5% 30 Years Conventional 7.25% 7.25% $135 $95

 State-of-the-Art Technologies  Track Record of Low Utility Bills  E NERGY S TAR Home Label The Maplewood Quality Homes Cost Sheet Acme Homes Model: Vanilla Net $173,000$173,000 “Sticker Price” Down Payment Net Monthly Payment (_ 5 __% Down) Minus Cash back* Net down payment Mortgage Payment Plus monthly utility bills 180%180% Monthly Costs Rate-of-Return Resale Value $170,000$170,000$3,000$3,000 $8,650$8,650$8,500$8,500 $0$0$0$0 $150 $150 $8,500$8,500 $1,121$1,121 $8,150$8,150 $1,236$1,236 $135$135 $1,101$1,101 $20$20 $95$95 $1,216$1,216 -= - = -=  State-of-the-Art Technologies  Track Record of Low Utility Bills  E NERGY S TAR Home Label Monthly Cash Flow

How Do E NERGY S TAR Homes Offer Lower Cost? Point of Sale Material from E NERGY S TAR Homes Cost Sheet The Competition: $1216/Month * Quality Homes: $1236/Month * * based on monthly mortgage, utilities and taxes

23 How Do E NERGY S TAR Homes Offer Lower Cost? E NERGY S TAR Homes Cost Sheet Example Two: Sticker Price: Percent Down: Length of Loan: Mortgage: Interest Rate: Monthly Utility Bills: Competitor Quality Homes $120,000 $122,500 5% 5% 30 Years Conventional Chase 7.25% 7.25% $115 $85

24 How Do E NERGY S TAR Homes Offer Lower Cost? “E NERGY S TAR Home Calc” Sales Software Easy to use computer tools for producing… -Customized Cost Benefits -ENERGY STAR Mortgage Impacts -Instant Affordability Analyses -Point-of-Sale Material

Quality Homes: Featuring E NERGY S TAR Homes More Value for Less Cost! The Competition: $1570/Month * Pulte Homes: $1550/Month * and $350 Less Down Payment * based on monthly mortgage, utilities and taxes

26 More Value for Pennies a Day More… Comfort Quiet Safety Durability Peace of Mind All for 30¢ a day! * * Based on cash flow from 30 year loan and lower utility bills

27 III. How Does E NERGY S TAR Homes Offer a Value Advantage?

28 How Does E NERGY S TAR Homes Offer a Value Advantage? First look at the features that make E NERGY S TAR Homes More Efficient... -Tightly Sealed Construction -Improved Insulation -High-Performance Windows -Tightly-Sealed or Internal Ducts -Right-Sized, Efficient Equipment …in other words, tried and true technologies requiring no changes to preferred designs and layouts!

29 Energy-Efficient Features: Tightly Sealed Construction

30 Energy-Efficient Features: Tightly Sealed Construction

31 Energy-Efficient Features: Tightly Sealed Heating & Cooling Ducts

32 Energy-Efficient Features: More/Improved Insulation

33 Energy-Efficient Features: More/Improved Insulation

34 Energy-Efficient Features: High-Performance Windows

35 Energy-Efficient Features: Energy-Efficient HVAC Equipment

36 Energy-Efficient Features: Right-Sized HVAC Equipment

37 How Do E NERGY S TAR Homes Offer a Value Advantage?...Than Look at the Benefits to Your Buyers! Features -Tight Construction -Improved Insulation -High-Performance Windows -Tightly Sealed Ducts -High-Efficiency Equipment -Third Party Verification Benefits -Lower Monthly Costs -Improved Comfort -Quieter Home -Improved Indoor Air Quality -Increased Durability -Quality Assurance -Less Obsolescence -Higher Resale Value

38 How Do E NERGY S TAR Homes Offer a Value Advantage? Sales Truism... People Buy on Emotion and Justify with the Facts…

39 How Do E NERGY S TAR Homes Offer a Value Advantage? So Make the Facts Obvious! Point-of-Sale ENERGY STAR Homes Tools: - E NERGY S TAR Homes Consumer Fact Sheets -E NERGY S TAR Homes Consumer Video

40 How Do ENERGY STAR Homes Offer a Value Advantage? So Make the Facts Obvious... Point-of-Sale Customized Tools: - Mock-up/Open Wall Assemblies - Technology Displays - “Benefit” Labels - Checklists - “Value” Questions -After-Sale “Feel Good” Meetings

41 IV. How Do E NERGY S TAR Homes Offer a “Brand” Advantage?

42 How Does E NERGY S TAR Homes Offer a “Brand” Advantage? Marketing Tool Kit -E NERGY S TAR Logo -Drop-in Ad Modules -Promotional Concepts -Sample Concept Ads -E NERGY S TAR Homes Buyer File

43 -E NERGY S TAR National Brand Campaign -E NERGY S TAR Homes Editorial Campaign -E NERGY S TAR Homes Consumer Workshops How Does E NERGY S TAR Homes Offer a “Brand” Advantage? EPA Outreach Efforts

44 -ENERGY STAR Homes Certificate -ENERGY STAR Homes Plaque -HERS Rating How Does E NERGY S TAR Homes Offer a “Brand” Advantage? Product Differentiation Tools

45 E NERGY S TAR Homes Logo

46 E NERGY S TAR Homes Certificate

47 Sample HERS Certificate

48 V. Wrap-Up

49 E NERGY S TAR Homes Sales Training Wrap-up: Why Apply E NERGY S TAR Homes Sales Training Tools? Because everyone benefits… -Home Buyers can get more value for less cost and great feeling they are contributing to a cleaner environment -Builders can increase revenues/profits with more satisfied customers -Realtors/Sales agents can close sales quicker and increase commissions -EPA can prevent millions of tons of carbon emissions

50 -Sell cost, NOT Price -Sell Added Value -Differentiate Your Product with the E NERGY S TAR “Brand” E NERGY S TAR Homes Sales Training Wrap-up: Formula for Success

51 Appendices -Latest E NERGY S TAR Homes Update Newsletter -E NERGY S TAR Mortgage Comparison Matrix

52 How Do E NERGY S TAR Homes Offer Product Differentiation? Product Differentiation Tools Energy Bill Warranty -Guarantees annual space conditioning bill not to exceed set amount -Backs up positive-cash flow claim -Typically entails extra quality assurance -Differentiates energy efficient home builders -Available from multiple sources: –Utility programs –Product manufacturers –Home energy rating providers –Directly from builder

53 E NERGY S TAR Homes Marketing Tool: Home Buyer Checklist