Solar panels on your house can make it difficult or easy to sell your house fast for cash, depending on whether you own the panels and if potential buyers are green energy conscious. This article will discuss the pros and cons of different types of solar panel ownership and their impact on the process of selling your house.
Solar panel ownership can be broadly categorized:
Fully-owned panels are wholly owned by the homeowner. They add home value and may increase the appraisal value.
If you sell your house for cash with fully-owned solar panels is straightforward as no third parties are involved. The appraisal process will indicate the collective value of the house to help you set the sale price. Research shows that a house with fully-owned solar panels can have a higher value by up to $15,000.
Indicate that the house is solar home ready in your listing description to attract potential cash home buyer keen on green technology and explain the higher sale price. Most listing services now provide “green fields” for sellers and real estate agents to fill out when creating a profile for their property.
The “green fields” indicate environmentally friendly home features, such as solar panels, LEED certification, and passive solar. Highlight the long-term benefits of solar panels to potential homebuyers and real estate agents.
Once you have found a buyer, you will transfer the ownership of the house, including the solar panels, to the new buyer. For an easy house transfer process, have all the solar panel documentation, including the original sale agreement and warranty documents.
Also, provide the new homeowner with your solar company’s contact information. If the panels are fairly new, the warranty may still be in place, guaranteeing the new home buyer peace of mind for years to come.
The only way that fully-owned solar panels would inhibit the sale of your house is if they are old, dysfunctional, and bad-looking. In this case, they would significantly lower the value of the house and its curb appeal, causing hesitance among potential buyers.
Creditors may also refuse to finance the house. Your best option would be to sell the house as is to a cash buyer at a lower price than the fair market value.
To avoid such a scenario, consider replacing the solar panels with newer ones and then factoring in the replacement price into your listing price.
Besides, you may be eligible for a rebate whereby your state gives you an incentive on the old panels. Alternatively, remove the panels, repair the roofing if necessary, and sell the house at the appraised value.
Selling a house with leased solar panels is slightly more complicated as you have to involve the solar power company. Most lease companies install the solar panel system on the house free of charge and charge payments over the lease period—usually 20-25 years.
The downside of selling a house with leased solar panels is that some lenders are unwilling to finance a house with them, decreasing your pool of potential buyers. Besides, leased panels do not increase the value of your house.
You may also have bought the house with solar leases in place, making it difficult to track down the previous owner to get access to the original lease agreement for transfer to the new owner.
Some companies have a clause in their contract that prohibits you from transferring the lease or terminating the lease agreement for solar equipment. If you do, you would be charged a penalty for loss of revenue through the FIT payments and for the removal of the solar panels.
There are two main ways to go about selling a house with leased solar panels:
Before listing the house for sale, enquire with the solar company if they have an option to transfer the solar panel lease and what the process entails. Review the lease terms so you can accurately explain them to potential buyers. Put together the lease agreement and payment schedule for an easy lease transfer once you find a buyer.
Financed panels are when you have obtained a separate loan to buy them. Therefore, unlike leasing, where you pay a monthly FIT payment, you pay a loan installment to the lender.
When selling a house with financed panels, you can either pay off the loan and sell the house as you would with fully-owned panels or find a potential buyer willing to take up the loan.
If you are selling to mortgage buyers, it is best to pay off the loan as most lenders are hesitant to finance a house with financed panels. There is a risk of the panels being reposed by the solar company.
Besides, the additional loan may through off the home buyer’s debt to income ratio, affecting their eligibility for the mortgage. The benefit of paying off the loan is that you now fully own the panels, which are factored in the appraisal, increasing the value of your house.
Below is a look at three approaches to selling a house with solar panels.
If you want to save on real estate agent commissions, consider selling the house yourself. You need a good understanding of how the sale process works, how to fill out the paperwork, and how to execute ownership transfer.
Hire an appraiser to determine the value of the house to be able to set a fair price. Stage the house, list it on various listing services, and set an open house schedule. Evaluate the offers you receive to determine which buyer would be most suitable.
You will still need to engage a real estate attorney, especially when closing and transferring ownership of the house.
Hiring a real estate agent is the most suitable option if you would rather outsource the sale process. They will oversee the entire sale process, including doing a comparative market analysis to determine the best price for the house.
A real estate agent will also list the house, recommend staging, host open houses, negotiate offers, and finally close the sale. If you are transferring your solar panel lease agreement or loan, they will also facilitate it. Hiring a real estate agent may seem costly, but it is worth it.
How to sell my house fast for cash? Selling to a cash buyer is the fastest way to sell the house as is. Since there aren’t too many people involved, you can negotiate terms and a price that works for you. They may be willing to buy the house even if the panels are old. Typically, they negotiate for a much lower price than the fair market value.
Aside from complications in the buying process, particularly if the solar panels are leased or financed, some buyers find solar panels unattractive. The panels can also make roof maintenance much more difficult and are likely to cause damage to your roofing.
If the house is located in an area that is predominantly cold throughout the year, the panels have a low power output, which minimizes efficiency in energy conservation.
Solar panels can affect how you sell your house. Depending on the ownership of the panels, the sale process can be easy or complicated. If you fully own the panels, it is advantageous to the sale process as they raise the value of your home.
Conversely, if the panels are leased or financed, you would need to buy out the lease or payoff the loan to fully own the solar panels. These options are expensive, and you may not have money to pay upfront.
The alternative would be to seek a buyer to whom you can transfer the lease or loan. It would take longer as fewer potential buyers are willing to shoulder the lease or loan burden. Consider finding a cash buyer such as wesellhousesinDenver.org to buy your house as is.
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