If you’re buying or selling a home with solar panels, here is what you need to know to make sure the transaction goes smoothly.
Selling your Salt Lake City home? Get a free home value report
Buying a Salt Lake City home? Search all homes for sale
If you’re buying or selling a home with solar panels, there are some important considerations you need to take into account.
First, remember that when you get solar panels, you get savings. With savings, you’re adding value. Think of it this way—if you have an investment property, how do you determine its value? You get the rents and the expenses and take a capitalization rate based on the market.
When you save money on a property, it adds value to that property, so one of the first things you must do if you plan on purchasing panels for your home or you already have panels is calculate what your savings will be every single month. First, what savings will you need to break even? Second, what are you going to calculate if you’re selling the property with solar panels on it so you can take those savings and demonstrate that as value?
One of the biggest challenges I run into is how people advertise solar panels. Not all solar panels are the same, and in many cases it’s like comparing apples to oranges. Some are very high-end with great efficiency and some are more than 10 or 15 years old. The latter scenario can be a problem because technology is always changing.
“
”
When you get solar panels, you get savings.
”
If you’re a seller, you need to consider whether your solar panels were purchased or leased and if there is going to be a lien for them. Most people are still catching onto solar panels and may not be as excited about them as you are. They may not want to take on your lease. If they don’t want to take on your lease and you have to pay it off, you’ll have to remove them from the property. That means you’ll need to have the property inspected to make sure they’re properly removed.
If you’re a buyer and you’ve evaluated the cost value and the benefit of the solar panels and decided whether they’re owned or leased, your next step should be to have a professional inspect the solar panels. A normal home inspector can’t examine them the same way a professional can, and that can cause appraisal issues. If you spend $50,000 for solar panels, are you sure an appraiser will be able to appraise it for $50,000 or more? They may be able to add an average increase of as much as $15,000, but a lot of times, it depends if they can really prove that value.
This is why it’s so important to hire the right people, get the right product, evaluate if it’s paid off or not, and see if it’s truly a benefit for you. I love solar panels, and being energy efficient is very high on my list of priorities. Whether you’re buying or selling a property with solar panels, you must do your homework. If you’re a seller, this will ensure the transaction is handled in a systematic way and you get the most money out of your property and the most savings. If you’re a buyer, it will ensure you get the best deal and that it’s getting negotiated correctly.
If you have any questions about this topic or you’re thinking of buying or selling a home in our market, please feel free to reach out to me. I’d be happy to help.
