Hire A Top Real Estate Agent To Sell The Benefits Of Solar
Whether you choose to buy out or transfer your solar panels, work with a top real estate agent who has experience selling homes with solar. An agents expertise is especially essential for the following components of your home sale:
- Pricing your home:Pricing your home right is one of the biggest factors that will determine how much your home eventually sells for.If you buy out your solar panels, your agent can assess how much value your solar panels add to your house based on comparative listing and sale data in your market. If you choose to transfer the lease, your agent will likely have a different pricing strategy which weighs the need for buyers to take on the solar lease.
- Thorough marketing to highlight solar benefits: Every platform your home listing appears on should highlight the solar panels and the renewable, affordable energy they generate for the house. Your agent can articulate the benefits and details of the lease or ownership concisely in the marketing campaign, making your homes solar capabilities an attractive extra for buyers.
- Communicating the details of solar with buyers: Real estate agents experienced in navigating deals involving the transfer of solar leases can explain the process to wary buyers who do not understand how it all works. If the buyer gets cold feet at any point of the process, your agent can get them back on track by providing information and bridging the gap between them and the solar company.
Reasons To Buyout Of Your Solar Lease
1. If youre planning on selling your home soon, buying out your lease can add thousands of dollars in value when you go to sell. Instead of waiting till your lease ends or keeping the leased panels on your roof, the additional value added to your house can greatly outweigh the cost of buying out your loan. For example, if your buyout cost is $7,000, your system could add more than that to your homes value, making it a reasonable and financially sound option.
- Keep in mind that leased systems add little value to your home. While some solar companies report painless lease transfers, it can still cause a headache. Some people also dont like the idea of taking over a solar lease when buying, which could make your house a harder sell.
2. Your lease buyout amount might be cheaper than your monthly payments. This varies on a case by case basis, but some of the analyses weve seen show monthly payments around $14,000 versus a buyout cost of $7,000. This route would help you save money in the long run if your buyout amount is less than your monthly payment.
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A Solar Lease Can Make It Difficult To Sell Your Home
Solar leases are seen as an obstacle by many real estate agents selling solar homes. We discovered that solar homes can sell 20 percent to more than 100 percent faster than those without solar. But if theres a solar lease in place, they tend to sell more slowly. This is primarily because they complicate the selling process.
In addition to my own stories above, here are a few examples of professionals who have found that a solar lease can make it more difficult to sell a home.
Janelle McGill, a Fort Collins real estate agent and consultant who offers free classes for agents, homeowners, solar installers, and utility companies, maintains that leased solar panels dont add any real value to homes. This is because buyers are sometimes unwilling to take over solar leases. If buyers do agree to a transfer and the process is delayed for any reason, it will delay and might even cancel a closing.
We agree with her sentiments: while there are reasons people lease solar panels, an easier real estate transaction isnt one of them!
Blake Guinn, a Nevada real estate agent, is an expert in the realm of residential solar systems and property sales. He warns that third-party-owned systems are very difficult to buy and sell.
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Problem Areas When You Are Selling Your Solar Homes
Most people, when they decide to go solar, may not have the financial resources for buying solar panels outright. As so much emphasis is given by federal, state, and local governments to promote solar energy, numerous financial schemes are available to fund the purchase or compensate for the exorbitant cost of solar installation.
If you have availed of solar loans to buy the solar panels at home and you have not yet cleared the loan, it can affect your homes resale value. The same is the case when you are choosing the lease option.
This doesnt mean you should not opt for financing or leasing. There is no harm in these options as long as you understand their implications and take the right steps to reduce its impact on your homes resale value in case you decide to sell it before the repayment is completed.
Lets see how this can be handled.
Are The Solar Panels Owned
If your solar panels are owned by yourself, the selling process will be straightforward compared to leased panels.
As you own the solar panels outright, there is no one else to contact, and you can move forward with your sale with ease.
You can even expect your house to sell for more money! Thats right, more money for the same house!
Studies have found that homes with standard solar panels sold for roughly $15,000 more than houses without solar panels or smaller systems!
Thats some sweet cash in your back pocket to put towards renovations in your new home or an all-mighty treat yourself moment!
Buyers seem happier to spend more on these properties, knowing that they will have a more straightforward buying process and can enjoy the benefits of owning solar panels on their roofs.
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How To Get Your Property Ready For Sale
If the panels are still new
The newer your panels, the more likely people will be happy to purchase the house. And if youâre currently taking FIT payments, these will be passed on to the new owners. This is of course not a bad deal for new owners, even as the tariff has reduced. Itâs still an income and they receive free electricity.
In addition to that income, the new owners will have panels that are still relatively young, and therefore covered under warranty, as well as being robust enough to last for the years to come.
If you sell when new though, you have the obvious downside of missing out on the FIT payments in the years left in the FIT contract. Again, while this may not be a huge amount, relatively speaking, itâs still money.
If itâs a mature installation
Youâre still looking at a property that has value. The increased energy efficiency that the installation brought to the property will continue to make a difference to the homeownerâs financial situation, due to the reduced costs.
Once youâve decided to sell your property, you have to make a few decisions around the property and the solar panel aspect that will help a sale to go smoothly. Ignoring the following points may mean you lose money when a sale takes pace.
If you’ve had difficulties already…
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Navigating The Solar Loan
When homeowners purchase a system with a solar loan, they get to spread out the cost over time, while enjoying access to benefits that come with purchasing and owning a solar power system, like theFederal Solar Tax Credit. If its financed through a secured loan, such as a home equity loan, the balance will need to be paid off before the home is sold. When an unsecured loan , is used to finance solar the home can be sold before the loan is paid off, however, the loan follows the seller.
Potential homebuyers are willing to pay more for a system theyll own versus a system that is leased. So when youve paid cash for your system and own your solar panels outright, the more likely it is to get more money for your home and enjoy a streamlined sales process.
Selling a Home With Leased Solar Panels
Homes with a solar lease can pose some challenges when being sold, so here are a few factors to consider before listing the property. When leases are used, there are two ways of handling the sale of the home. The first option is to pay off the rest of the lease. With this option, the seller owns the solar system before the sale and the home commands a higher selling price. The lease could be transferred to the new homeowner, and your leasing company will help you do just that. However, you should be aware that some home buyers may not want to take over a solar lease.
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Fully Owned Solar Panels
When selling a house with wholly-owned solar panels, a homeowner can sell the house with existing solar panels without transferring or removing them from service. The new owners will benefit from lower energy costs just as if they had installed their panels except now those savings are built into the property value.
If you choose this option, make sure that prospective buyers understand it is solar-ready. In addition, many states have rebate programs that will pay you for your old panels after the sale, which is another incentive to keep them.
If possible, try not to transfer ownership of the solar system with the house. It may require calling in a third-party company to remove the panels before closing escrow. However, lenders rarely allow this and can be very costly if attempted self-installation.
Depending on your financial arrangement with your solar installer , you might have to pay all or part of an installation removal fee.
Selling A House With Owned Solar Panels
Is it harder to sell a house with solar panels?
Selling a house with owned solar panels is more straightforward than selling a home with leased panels.
When you own your solar energy system outright, youll likely get more money for your home , and enjoy a more straightforward sales process.
According to the Lawrence Berkeley National Laboratory, homes with standard-sized 3.6 kW systems sold for about $15,000 more than homes with smaller systems or no panels.
If youre wondering how to get out of a solar lease, selling your home can give you the funds to buy your panels out of the contract, while also creating earnings.
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Selling A House With Solar Panels
Life is unpredictable. When you first installed a solar panel system on your home, you looked forward to many years of generating your own electricity and helping the environment. But just a few years later, you have to sell your home. Although you know that solar panels can increase the value of your home, youre worried they could also make selling your home more complicated.
Thankfully, complicated doesn’t mean impossible. In fact, it might be easier than you think. With this guide, youll learn what you need to know about selling a house with solar panels. Well answer any questions you might have, and share the requirements and liabilities to be aware of, based on how you financed your solar energy system: cash purchase, solar loan, solar lease, or power purchase agreement .
Issues With Buying A Home With Solar Panels
So far, we have mentioned the positives of having solar panels installed and that there are lots of homes in the UK that have had them working effectively to generate a small income every year.
However, some drawbacks over the installation of solar PV have become apparent.
The main one is that some mortgage lenders will have an issue with your roof being leased to a solar power company and not owned by the homeowner outright.
In the process of selling, the potential buyer will need to check with their mortgage lender to ensure that they can access a mortgage to buy your home.
The potential buyer will also need to appreciate:
- Many of the solar power firms that installed solar panels have stopped trading and finding out who currently owns an installation can be difficult
- The installation company may have signed over the panels to an agent and theres a chance that they may charge an admin fee when your property is sold
- A solicitor will need to check the lease terms to see whether the homeowner needs consent from the installation company over whether they can extend the property or even sell it.
This last point is very important, particularly if the installation firm has stopped trading because whoever owns the property may have to pay compensation should the solar panels be removed, or if they are removed temporarily so roof repairs can be carried out.
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Factors That Influence The Value Add Of Solar Panels
While these simple calculations can give you a ballpark, there are a number of factors that influence the value add of solar panels. Some of the most prominent include:
- Geographic location: Different communities experience different electrical costs . Additionally, geography can influence the amount of sun exposure you get, as well as the social benefits of installing solar power.
- Local solar installation prices: Another geographic factor is the cost of getting a new system in your area. If a buyer would save money by purchasing a home with a system already installed, it will make your home that much more valuable.
- System output: As you can see from the chart above, a larger system with more energy generation will provide more added value.
- System age: If you have an older solar system, youll need to account for depreciation. Older systems wont add that much value to your home when you sell it, as theres a higher chance the buyer will need to do repairs or replace parts sooner.
- System replacement value: Along the same lines as system age, how expensive or difficult parts of your system would be to replace affects the added value of the system overall.
Does The Installation Meet The Recommended Standards
The Council of Mortgage Lenders and the Building Society Association have teamed up to put together some solar panel guidelines for installers, mortgage providers and customers. These guidelines set out the minimum criteria that solar panel installations should meet, as well as the terms required in each lease.
Providing the installation and the lease terms meet these guidelines, then most mortgage lenders will not have a problem with these. If the terms do not meet the guidelines then a lender will insist that the solar panel lease is varied. This will add time to the Conveyancing process.
Ultimately, the decision lies with the mortgage provider, and different lenders may have different policies. For this reason, its important to speak to your mortgage provider and familiarise yourself with their policy.
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How To Sell A Home With Solar Panels
Selling your home with solar panels can be a complicated process, so its nice to have a clear guide that helps you understand the steps, so you can enjoy the maximum return on your investment.
As a home seller, you need to be clear on the ownership status of your solar panels, as that could seriously improve or hamper the sales process. Additionally, you can increase the likelihood of a smooth sale if you can communicate the benefits provided by solar panel ownership to prospective buyers and real estate agents.
The more information you can provide upfront to your real estate agent and prospective buyers, the better. On the flip side, the more people that need to be involved in selling the house , the slower and less attractive the sales process might be to potential buyers.
If you’re thinking about selling your home with Palmetto solar panels, you should learn about your options for transferring the warranty and Palmetto Protect service plan to the new owner. You can also contact our service department to schedule an inspection of your solar panel system to verify that everything is up-to-date before you sell your home.
Is It Harder To Sell A House With Solar Panels What You Should Know
- On 12/02/2021
Solar panels are one of those home commitments that can really benefit a homeowner and the environment but require some serious long-term planning.
For one thing, the return on investment period for solar panels in many parts of the country is somewhere around 8 years, which may be longer than many families plan to stay in a given home.
When you commit to buying or leasing solar panels, recognize that youll be creating an obligation that will pass to your buyers. In certain markets, you may find that having those solar panels actually boosts your homes value, making your own investment even better, but you have to find the specific buyers who see them as a boon and not a burden.
Heres what to consider, whether youre shopping for panels now or trying to sell your home with the current panels on it.
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Selling A House With Solar Panels Do Solar Panels Affect House Sales
Solar panel installation can add value to your home and increase its resale value. In a Zillow study, homes with solar installations sold for a higher price. However, the added value is not always as high as the Zillow study indicates. There were some places where the added value was higher and others were lower. The Lawrence Berkeley National Laboratory study found that solar power increases resale values by an average of $5,911 per kilowatt installed on homes.
In a survey by the National Association of Realtors, 32% of homebuyers said they were concerned about their heating bills. But only 4% specifically search for homes with solar panels. And while you may be able to convince a prospective buyer to take over your solar lease, the fact remains that a solar panel can make your home harder to sell. This depends on your ownership status. And if youre planning to rent the property in the future, be sure to tell potential buyers that the solar panels will help you save money on electricity.
Installing solar panels on your home can be a great way to transition to green energy. There are companies that will install the panels for you for $0 down. These companies can also help you with financing. If you decide to go with a solar lease, make sure you find a lender that will finance the solar installation. If you have no other source of financing for your solar installation, you can use a solar lease instead.