Things to Consider When Buying or Selling a Home With Solar Panels
Residential homes with solar panels are becoming more commonplace than they were even just a few years ago. Companies that sell panels are popping up across the country, and homeowners who want a greener, cheaper alternative to traditional power sources are having them installed. Buying or selling a home with solar panels can be a little more complicated than a routine sale. There are some things to consider on both sides of the transaction.
Solar Panels as a Selling Point
Homeowners typically install solar panels for two main reasons: The environmental impact, and to save money. When they’re ready to sell the home, they hope that buyers will see them as a desirable addition.
Harnessing the power of the sun is an efficient and effective method of renewable energy. Many see it as an easy way to reduce their carbon footprint and avoid using power sources that emit greenhouse gases and deplete fossil fuels.
The other main attraction of solar panels is that by generating their own power from the sun, homeowners can reduce their power company bills. Many states, including Missouri, use net metering. This means that when a family’s solar panels collect more energy than they use, the excess is distributed to others in the power grid. In return, the household receives credits toward their own power use.
When selling a home with solar panels, the impact on the environment and cost savings can be big selling points. Consumer Reports estimates that buying panels can decrease electric bills by 70% to 100%. But the seller should not assume that potential buyers will know this or understand the process. It is often up to the seller and their agent to educate buyers about solar panels. Sellers and their agents should be ready to explain how the system works. It’s also a good idea to produce real billing data about how much money has been saved.
Pricing a Home With Solar Panels
If solar panels are such a big selling point, one would think they should increase the market value of the house. This isn’t always the case; even if a seller asks for a higher price because of a solar panel installation, it’s rarely the case that they get a dollar-for-dollar increase.
A lot will depend on the local housing market and the pricing of comparable homes. Equipping a home with solar panels costs roughly $20,000 to $30,000. Bumping up the asking price of a house by that much to recoup the cost is unrealistic. Even with the savings gained by using solar energy, the house will likely price itself out of the market.
Owned vs. Leased Solar Panels
The asking price can reflect some of that extra cost as long as the seller purchased the panels and isn’t leasing them. Because of the high cost, though, many homeowners opt to lease panels, rather than buy them outright.
Leased solar panels will not increase the value of a house at all. In fact, the seller may actually need to reduce the asking price. This is because the new owner will need to take over the lease, which, depending on the terms of the contract, could be for as many as 15 years.
Buying a home with solar panels that are leased means adding another monthly payment along with the mortgage. It is unlikely that a buyer will be willing to pay a higher price to buy the house under those circumstances, no matter how much they will save on the power bill.
One thing a seller can do, if they can afford it, is to buy out the lease. If they own the solar panels outright, it may be more appealing to buyers and the sellers might be able to ask a bit more.
Concerns About Buying a Home With Solar Panels
Buyers don’t always know much about solar power, so buying a home with solar panels might be intimidating. It is a good idea for a seller to find a real estate agent who understands the advantages of them. Among the traits to look for in a realtor is someone who recognizes the value in your home and can put together a marketing strategy to highlight it. This is particularly important with features like solar panels, as they can help alleviate any uncertainty a potential buyer may have. And more importantly, find those buyers who will see the value in such home additions.
Taking Over a Lease. Assuming responsibility for a solar panel lease is a commitment that will involve additional costs of anywhere from about $50 to $250 per month. The buyer must also meet the credit requirement of the solar company. This could rule out some buyers with poor credit ratings, as they’re already taking on a new mortgage. Transferring the lease is not complicated but will involve extra paperwork. Special care should be taken so the process doesn’t delay closing.
Maintenance. Buyers may wonder what type of maintenance goes along with having solar panels. Very little needs to be done other than cleaning the panels every two to three months. Solar companies will do this for a fee, but a homeowner can do it themselves if they choose.
Warranties, Insurance, and Replacement. One thing buyers should ask is the age of not only the solar panels but also the roof. Warranties for the panels should transfer with the lease or the purchase. And solar panel insurance is included in most homeowner’s insurance policies, so the buyer can be confident that any damage, for instance from a storm, will be taken care of.
The age of the roof and panels can be important, though. Replacing a roof with solar panels is an ordeal. The panels must be removed by the solar company before the roofers can take over. Then, once the new roof is in place, the solar company must re-install the panels.
Getting a new roof is often recommended as part of the list of things to fix before selling a home. The seller will have an easier time selling a home with solar panels if both the roof and panels are somewhat new. If either is nearing the end of its life, the asking price might have to take a significant hit.
Curb Appeal. Solar panels must be installed on the south-facing side of a home. This could end up being the front or a highly visible side of the house. The look of roof-mounted solar panels may be a turn-off for some potential buyers, and there is nothing a seller can do about it. This doesn’t mean selling the house will be impossible, but it may take longer and require some creative marketing.
Marketing Matters With Solar Panels
The best way to sell a home with solar panels is to find a realtor who can effectively show off the advantages. In our post “Follow These 3 Steps to Find a Real Estate Agent,” the third step is to interview agent candidates. When you do, you can find out about their knowledge of solar power and their experience in selling homes with solar panels. Ask them how they intend to market the home and how they will find potential buyers who understand the advantages of buying a home with solar panels.
At Berkshire Hathaway HomeServices Select Properties, our agents can help you navigate buying or selling a home with solar panels or any special features.
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