OT: Heads up on buying/selling houses with Solar Panels

[aTotal360]

Just had a deal close yesterday and the remainder of the $$$ due on the panels was to be paid at closing to the solar panel company at closing. Per the sales contract from the panel installer, if the property is sold before the panels are paid in full, the remaining portion was to be paid from proceeds of the property sale at closing (no grace period either). The payments due were not assumable by the new buyer.

The seller had to fork over almost $18k in proceeds upon the sale.

So just a heads if you are planning on financing panels. I sure all companies do it differently, but this was my experience.

If you're buying, make sure to ask the question about it and get it in writing.

 

[HotMop]

My neighbor is in real estate in Florida, she won't accept any homes with financed solar panels.

 

[dorndawg]

Just had a deal close yesterday and the remainder of the $$$ due on the panels was to be paid at closing to the solar panel company at closing. Per the sales contract from the panel installer, if the property is sold before the panels are paid in full, the remaining portion was to be paid from proceeds of the property sale at closing (no grace period either). The payments due were not assumable by the new buyer.

The seller had to fork over almost $18k in proceeds upon the sale.

So just a heads if you are planning on financing panels. I sure all companies do it differently, but this was my experience.

If you're buying, make sure to ask the question about it and get it in writing.

As this becomes more common, won't folks simply bake it into the sale price?

 

[aTotal360]

I'm also seeing homeowners insurance going up because of potential roof issues caused by the install. It's virtually offsetting any savings.

 

[aTotal360]

For sure. Appraisal can be a problem because a lot appraiser are not giving them value. In a highly competitive market, the buyer is going to be strapped with it. Anywhere else, it will be on the seller.

 

[Xenomorph]

So if the solar panels earn $100/month those fine folks just lost 15 years of savings?

 

[johnson86-1]

As this becomes more common, won't folks simply bake it into the sale price?

I think appraisers are typically going to be behind the curve on things like this though. They seem to in general be bad at valuing additional features that every buyer doesn't care about. Where we live, pools are a feature that a lot of buyers want and some buyers don't, but appraisers value them at like 10 cents on the dollar. I think buyers that want pools actually value them and would probably pay closer to 75 cents on the dollar, but they pretty much don't have to because of appraisals unless they get into a bidding war where both buyers can afford to provide appraisal gap protection.

Sort of related, but had a friend wanting me to go in on him with a property for a fish camp. He looked at two essentially identical lots, except one was already bulkheaded and the other wasn't. The lot with the bulkhead was only $10k more than the one without and had about $16k worth of bulkhead, so my friend obviously went for the one with the bulkhead. Appraiser adjusted the lot valuation by $2k for a $16k bulkhead. Lots were basically for nothing but fish camps, and probably less than 1% of buyers would develop a lot and not put in a bulkhead but the appraiser would only give 12.5 cents on the dollar for it. Not a huge issue for that deal b/c obviously he was already planning on having a lot of out of pocket costs so being able to finance $8k less wasn't a huge deal, but a much bigger deal on fully developed lots where appraisal is likely to set a cap on the ultimate sales price. And for that seller in particular, while my friend would have valued the bulkhead at exactly it's cost (maybe even a little more to avoid the hassle), even if the seller had played hard ball, the appraiser gave ammo to reduce the price after the fact.

 

[Cooterpoot]

Appraisers in certain areas where solar is more prominent are already knowledgeable. It's still fairly new in growth in FL. It's non-existent in MS.

 

[The Peeper]

At first thought this seemed a little surprising but after thinking about it its not really any different than if you contracted with a metal building company to build a shop on your property and financed it through them, they are going to expect a payoff just like the solar company, if you were able to finance. Contractor didn't enter into a deal with the new owners, their agreement is with the seller. It's hard to get financing on something like that because if the owner defaults on the house mortgage its hard for the shop builder to get his money from the shop when its attached to the land he has no claim to. I guess its same w/ solar panels attached to a house

 

[Seinfeld]

This was one of my biggest concerns when I looked into solar panels last year. The gist of my proposal was $42K for a system with a 70% energy offset, meaning that I'd still be paying some electricity costs even after dumping all that cash down. If I then estimate roughly $150/mo savings on my future bills overall, I mean.... it'd take me 25 years to break even, and that's assuming no maintenance costs or significant degradation from the panels themselves.

So I then ask the guy, what happens if we're not in this house for another 25 years? His response was that every situation can be a little different, but usually solar panel owners transfer the remaining payments to the new home buyer during closing, and I just thought to myself... I guess I could see that occasionally happening, but that can't be the norm. If a dude put in a pool 2 years back and is now selling me his home, I'll of course take it into consideration when making an offer, but I'm sure as hell not taking over his payments.

Bottom line, solar is still way too damn expensive. We've got to keep working to figure out how to make it more economical for the average joe, but it isn't for me yet.

 

[Bobby Ricigliano]

What impact are you seeing from financed waterbeds?

 

[Shmuley]

Same question: BDM Room (asking for JLS).

 

[PooPopsBaldHead]

Same question: BDM Room (asking for JLS).

From my experience, I have taken a real *** whipping on those type of investments... But I don't mind.

 

[johnson86-1]

At first thought this seemed a little surprising but after thinking about it its not really any different than if you contracted with a metal building company to build a shop on your property and financed it through them, they are going to expect a payoff just like the solar company, if you were able to finance. Contractor didn't enter into a deal with the new owners, their agreement is with the seller. It's hard to get financing on something like that because if the owner defaults on the house mortgage its hard for the shop builder to get his money from the shop when its attached to the land he has no claim to. I guess its same w/ solar panels attached to a house

I would guess most solar financing companies do have an interest in the property, probably in the form of a second (or even third) priority mortgage or deed of trust. The solar finance company could relatively easily agree to financing with the new owner, but in order to release the original purchaser, they pretty much have to underwrite it as if it's an entirely new loan.