In this blog, we will discuss some of the most critical aspects of selling your home with solar panels and what proactive actions you can take before putting your home on the market to ensure a smoother transaction.
In a time where the preservation of our natural environment has become a critical topic, many homeowners have turned to clean renewable energy solutions such as solar panels. Solar systems have many positive attributions to consider, however, once it comes time to sell your home it can put a damper on the sale if you are not well informed and prepared.
Here are some of the most crucial factors to take in mind if you currently have a solar panel lease agreement.
Read Your Lease Agreement!
If you are selling a home with solar, take the time to go over your lease thoroughly before you put your house on the market. Many terms and conditions of lease agreements can vary depending on the solar company. For example, some leases may have a penalty for paying the lease out prematurely, and some might be easier to transfer to a new homeowner than others.
Disclosing is Key!
Let your real estate agent know that your home has solar panels and provide a copy of your lease agreement. You will also need to gather all repair or maintenance receipts and any warranty information. Along, with the yearly average of your electric bills to compare against the maintenance, monthly payments and lease term. Disclosing all this information early on will allow potential buyers to make an educated decision about purchasing your home and will enable them to make the financial arrangements needed to proceed with the purchase.
Solar Financing
If you are currently leasing your solar panels, it’s imperative to understand how financing for solar systems work and what it means to you and your potential buyers.
Most common ways to transfer the lease during the sale of your home are:
Transferring the lease agreement to the new buyers
To transfer the lease, the buyers must get pre-qualified and approved by the solar company for them to be able to take over the lease. Having to go through another credit check can potentially be a deal breaker if the buyers don’t have a strong credit score or depending on the type of loan they have qualified for.
Pre-Paying your solar systems
Paying the remainder of your lease agreement would be the easiest and fastest way to sell your home with solar panels, doing so, the new owner would only be liable to pay for the monthly utility bill and any future maintenance. If you are in a position to pay it off, we recommend you do it. Once you own your solar systems, it could potentially add value to your home. However, we do advice you to be cautious with this approach and have realistic expectations as azcentral.com explains in their solar article your home value may only increase a small percentage and not the full amount you paid for your solar systems.
Adding the cost of the lease to the price of your home
This is a less conventional way to transfer the lease, but many solar companies do offer this option. By adding the cost of the lease to the price of your home you allow the system to stay at your home, the person buying your home would not make any monthly payments to the solar company and would only need to comply with the non-monthly payment portions of this lease.
Although these are some of the most common ways to handle solar lease agreements, keep in mind every agreement may vary and have different stipulations, this is why it’s so important to read your lease thoroughly so you can develop strategies best suited for you.
Time Restricting
Solar systems lease agreements can be lengthy and restrictive; if you or the buyer is looking for a specific timeline to sell or buy this can be a big hurdle to get through, however, with proper planning and communication it can be done.
Solar can have many advantages to your wallet and the environment, but it can create many issues in the process of selling your home. If you are selling a home with a solar lease agreement or own your solar systems, we highly suggest consulting with an experienced realtor that has a deep understanding of how solar will affect you and your potential buyers.