Why’d you put those things on your roof?
No one is looking for a house with solar panels–at least not on purpose.
You’ll never sell that house!
Don’t believe a word from that group of naysayers. There are plenty of people looking for homes with green technology, including solar power.
And that comment about never selling your home? It’s not true! People selling solar-powered homes, for the most part, don’t do anything different than those selling traditional real estate.
There are however a few things you can do so that your home is more appealing to buyers.
If you’re interested in making the process easier, take a look at our tips for selling a house with solar panels
1. Be Prepared
Selling a home with or without solar panels requires preparation. Selling a house with solar panels means you’ll do more than stage the house and turn it over to your real estate agent.
Consider what questions you might have if you were a potential buyer, especially one not familiar with solar power. You’ll likely have questions from buyers, realtors, appraisers, and insurance companies.
Don’t get blindsided by off-the-wall questions. Gather ALL paperwork associated with your solar system and keep it in a folder or binder. Keep this and your notebook together and use both as a resource.
Know your why. Why did you think solar power would be a good energy option?
Maybe you’re a pioneer of the green energy movement. Or maybe you went to one of those home and garden conventions and talked to a solar panel representative.
Maybe like ECO Roof & Solar, you understand solar power offers a clean, safe, and affordable renewable energy option for your home.
Whatever your why is, people will have questions about your house. If you’re prepared with accurate answers you’ll give buyers and others involved in the sales transaction confidence about doing business with you.
2. Understand Your Solar System Contracts
You may be excited (or anxious) about selling your home but before you formally list your property look over your solar panel paperwork.
Are you a solar panel owner, or do you lease the equipment?
Congratulations if you paid cash for the solar panels at installation! This means the panels transfer smoothly to the new owner when you sell the house.
If you financed the system and have a remaining loan balance, you’ll pay off the balance before closing on the home sale.
Power purchase agreements (PPAs) and leased systems are also common. Read your contracts carefully and talk to a representative at the solar company if you need help clarifying information.
When you lease a solar energy system, the equipment may stay attached to your home but ownership of the equipment remains with the solar company. Be aware you’re responsible for paying whatever remains on your existing contract.
It’s possible that your buyer can assume the contract if they qualify and are willing. Review your lease or PPA before listing your home so that you, your realtor, and your buyer understand available options.
If you’ve financed your system, take a few minutes and review your financing terms.
3. Understand Your Financing
Did you finance your solar system? Many people do choose the option of purchasing rather than leasing. Understanding what type of financing you have makes a difference in how you manage the loan as it pertains to the sale of your home.
If you have an unsecured loan, you can sell the property with the solar panels and continue making loan payments.
Some homeowners purchase solar panels with a home equity loan or home equity line of credit. These are both considered secured loans. You used your home as collateral.
If you used secured financing, the balance of your solar panel loan gets paid off at closing through escrow.
The buyer’s realtor and the person in charge of closing at the title company will ensure the buyer understands this process.
Consequently, having a seasoned realtor on your team is making sense, isn’t it?
4. Find an Amazing Realtor
You don’t just want a good realtor, you want an amazing realtor and one who understands marketing a house with solar panels.
A realtor who has experience selling properties with solar systems is a gem. A realtor with this type of experience can help buyers and their agents understand the benefits of solar energy.
You want an agent who not only gets what you’re selling, you want someone who can stage your home so that its interior interest and beauty offsets the panels on the roof. Until a buyer understands how solar panels directly benefit them, they may not be thrilled with what they may perceive as a foreign object on top of the house.
Your realtor can help get everyone, including your buyer’s agent, excited about the benefits of solar power. Even more important, your amazing realtor can also work with appraisers, probably the second most important person involved in a successful home sale.
Working with the buyer’s appraiser does pose a few challenges when you’re selling solar.
5. Educate the Appraiser
Unless your buyer pays cash, they’ll pay for an appraisal. Your realtor likely put together a real estate market analysis when discussing your listing price. The appraisal is different, and unlike the market analysis, gives a financial value to your home.
Lenders require an appraisal before approving a home loan.
Unfortunately, home appraisers don’t always include the value of solar panels when calculating the price of a home.
You figure in the value of the solar system when determining the asking price of your home. If your buyer’s appraiser doesn’t, the buyer’s will probably offer a lower price.
Buyers normally present a lower offer anyway as a negotiation tactic but if the appraisal doesn’t include the added value of the solar panels, their offer could be significantly lower.
Say hello to your amazing realtor who steps in and proactively save the day with all the needed details.
In case the appraiser isn’t aware your realtor can offer information about leased vs. purchased solar systems and how each applies when valuing a home. Your realtor can also share a resource offered to home appraisers when they’re calculating valuation on a home using green technology.
An appraisal that fairly values your home including the solar system ensures your buyer has the best chance of obtaining financing. If your buyer is a cash-only customer the appraisal helps ensures a fair and reasonable offer for you.
6. It’s All About the Details
The appraiser looks at certain details such as the age of your home, the condition of your home’s systems, and how your home compares to recent comparable sales in the area.
Buyers and their realtors like details.
Put together all the details about your solar system. Remember the binder you created at the beginning of your home selling adventure? This is where you’ll use it!
Your solar system binder or folder should include at a minimum the following details:
- Date of installation
- Make and model
- Wattage
- Inverter type
If your panels or other system components have extended warranties include the warranties in the binder.
There are a few additional items you should include in your system folder that we’ll share later. If you forgot about the binder, it’s not too late!
7. Market Your Solar System as an Upgrade
Prospective buyers like details but they love upgrades.
A solar system is an upgrade and your realtor should market it as such. Home buyers pay extra for upgrades and most of them won’t at an eye at paying a premium for something they consider a lifestyle enhancement.
People who sell solar power when they market their homes, normally sell for an average of $15,000 over what a home with a traditional energy system sells for in the United States.
Appeal to a buyer’s desire for the latest and greatest and market your system as an upgrade.
Next up we’ll share one more item for your solar system binder.
8. Keep Records of Your Utility Bills
One of the most popular reasons people choose solar power for their homes is the energy savings. Prospective buyers may or may not have an awareness of how much they could save on their utilities.
Include your past utility bills in your solar system information binder.
This is proof for your buyer of their potential savings and could be another motivating factor in converting a showing to a solid purchase offer. Include details about how much you’ve already saved. Show your projected savings too!
Find out the average cost for electricity in your area. Calculate what you’re paying per watt. Show the comparison on a spreadsheet and include it in your binder.
Does your system produce the majority of the electricity you need? Does it produce ALL of your electricity?
If you show your buyer proof that you pay nothing or very little for electricity that’s a great incentive.
9. Highlight Incentives
Buying or leasing solar panels also opens up access to other financial incentives.
Some incentives are only available if you’re the original purchaser of a home solar system. Other incentives are available to any individual who lives in a home using solar power.
Each state has their own incentives for people who live in a house with solar panels.
Talk about the financial incentives on a separate sheet in your binder. Inform your real estate agent and make sure incentives are at least mentioned in your seller’s listing.
10. Age Matters
When you’re courting buyers the age of your home is a factor. Some buyers want a new home while others specifically look for a home that’s been loved by another family.
Age also matters when you’re selling solar panels as a buying incentive.
Younger solar systems do have more appeal to buyers. Go figure. The allure is the warranty.
The warranty on solar panels is normally 25 years. Excellent incentive if your system is relatively young–for your buyer.
Selling too soon after installing solar panels isn’t always an advantage for the seller since it can mean missing out on the full return on investment.
11. Emphasize Maintenance
When you decided on solar energy were you concerned about long-term maintenance?
Buyers also have concerns over long-term maintenance costs for solar panels. Another helpful thing you can do is include in your binder information about any maintenance expenses you’ve already covered.
While solar panels don’t require an outrageous amount of care, proper maintenance and periodic cleaning can help maximize their lifespan. Cleaning also helps solar panels work more efficiently.
If you share your maintenance schedule with prospective buyers it helps them see themselves doing some of the same things. Anything you tell them that shows owning a home with solar panels isn’t a chore can mean a purchase offer will come your way.
12. Relax and Enjoy the Ride
Selling a home equipped with a solar system isn’t much different than selling any other home.
Sure, you share more details about your home and how you’ve lived in it and enjoyed energy savings. And yes, your realtor will have a little more work than the average sale requires. There may even be a few more contracts than a home with a traditional energy system.
Do your part by educating everyone about the benefits of solar energy, choosing an awesome realtor, and making sure your home stages well. After that, you can’t do much but sit back and let the selling process take its course.
One more thing. Before closing day, do your own final walk-through of your home. If everything is in top shape when the buyer walks through, you’ll all meet at the closing table with a minimum of fuss.
Selling a House With Solar Panels?
In the past, owning a house with solar panels meant living off the grid. Not anymore! Solar powered homes are seen in every neighborhood.
Savvy and eco-conscious buyers look for homes with solar panels already in place. Using our tips should help you prepare for your home sale and attract the ideal buyer.
If you enjoyed this post and want more information about real estate, consider joining our real estate forum here where you’ll find others interested in marketing real estate.
Virtual Realty: How Do Realtors Make Money?