You want to know if solar panels add value to your home if you sell.
After all, it is a significant investment, and you want to make an educated decision.
In this article, I will cover the following:
- Will a solar panel system increase your home value if you sell?
- Selling a home with a leased or financed solar panel system.
- Selling a home with solar panels to cash or finance home buyers.
- A common approach when selling a home with solar panels.
- How banks look at solar panel systems.
- How appraisers give value to solar panel systems.
- Tips to prepare to sell a house with a solar panel system.
Having the cutting-edge technology of a solar panel system is exciting. It means we are advancing as a society. We are getting closer to having the "Jetsons" smart home.
I'm all for it. I love it!
Developers are offering homebuyers the opportunity to own solar-powered homes. This offering seems to be popular among homebuyers nowadays.
In recent years we have seen a dramatic increase in the number of homes with solar panels in Kissimmee. But most of these systems are not paid off; the solar panel system is either leased or financed.
So, today, we will cover how the solar panel system affects the home value when you sell.
Note: A community where all homes have solar systems is called a solar community. You can find one in Davenport or Saint Cloud.
Will a Solar Panel System Add Value to Your Home if You Sell?
It depends; solar panels are a great way to reduce your carbon footprint and save money on energy bills. But the added value will depend on whether the solar panels are paid off and market conditions.
Some homebuyers may show interest, but most will factor the cost into their offer price. In fact, if you don't own the solar panel system, you may lower your home's value if you decide to sell it in the future. But if you own the solar panel system, you could be getting a significant added value to your home.
Selling a Home With a Leased or Financed Solar Panel System
So you installed a solar panel system to save on your electrical bill or increase your home's value. Whatever the case, you thought of the solar panel system as an upgrade to your home.
Now, you are considering selling your home with a leased or financed solar panel system. And you want to know how much-added value the solar panels give your home.
When selling your home with leased or financed solar panels, you will face challenges. There is minimal to no added value.
Here is a common approach other homeowners have opted for in the past.
A Common Approach When Selling a Home With Solar Panels
Here are several ways to handle the sale of your home when you have a leased or financed solar panel system.
- Offer to pay off the solar panel system at closing with your net proceeds. This option will depend on your current situation and may or may not be helpful for you.
Pro Tip: Know what your profits will be to avoid surprises at the closing table.
- Have the buyer take over the solar panel system loan. Many homebuyers willing to take on the loan sometimes won't qualify because of their debt-to-income ratio.
Pro Tip: Have the buyer get approved for the solar panels immediately or before you accept their offer. This will avoid taking your home off the market and losing a better opportunity to sell your home.
- Split the cost: Offer the buyer to pay 50% of the solar panel system; this way, the buyer may be able to take over the loan/lease.
Selling Home With Solar Panels To a Cash Buyers Or Financing Buyers
If you sell to a cash buyer, it is a more straightforward transaction. You can negotiate on who pays for the solar panel system fast. No dealing with mortgage company's rules and regulations.
If the buyer is financing, the home sale is much different. We deal with a bank or mortgage company with many reservations about solar panel systems. This could extend negotiation time. Involve extra paperwork. Or result in the cancellation of the offer due to the buyer's inability to secure the loan.
How Banks Look at Solar Panel Systems
Banks/Mortgage companies are not giving value to solar panels. Leased or financed systems get a lien against the home. And this is why banks look at solar panels as a liability, not an asset.
But, we are talking about a significant upgrade if paid off. In this case, the value of your home will increase. Yet, if you still have a mortgage on your solar panels, then the value of your home will not go up.
Why is the appraiser's opinion of the value of solar panel systems important? Because you could get more money for your house.
How do Appraisers Give Value to Solar Panel Systems?
Solar panels are one of the most challenging adjustments for appraisers in Kissimmee and other areas.
I've talked to many local appraisers about their solar panel's value approach.
Local appraisers say, ''We do not give value to solar panel systems if leased or financed."
If the solar panel system is financed but with a low balance. You may get some value, but it will be at the appraiser's discretion.
But if you own the solar panel system, free and clear, it will be a significant upgrade. We have seen appraisers give 40% to 70% value of the cost of the solar panel system.
4 Tips on How to Prepare When Selling A Home with Solar Panels
Tip #1: Have all the solar panel system paperwork organized and ready to show buyers.
Tip #2: Have the solar panel company's information available.
Tip #3: Learn how the solar panels can be transferred to a new owner.
Tip #4: Request a payoff from the solar panel loan servicer.
Bonus tip: Have all the benefits of solar panels ready for homebuyers. Many people don't know how beneficial solar panels are.
So will solar panels add value to my home? The answer is a resounding, Maybe. This depends on whether you lease them or pay them off.
If you're considering adding solar panels to increase your home's value. Do your research and consult a local real estate agent. But if you are getting your solar panel system because of its benefits, then it's a no-brainer.
Ok, that is all I have for you!
Thank you so much for reading my article!
Book a free consultation if you have questions about selling your home with solar panels.