Will Solar Installation Affect Your Ability to Buy or Sell a House?


Filed under: Market Comentary


Residential solar power is becoming more common as people are looking for ways to improve the energy efficiency of their home. If you are buying or selling a property that has solar panels, then there are a few things that might pop up during the real estate transaction.

Will Solar Affect a Real Estate TransactionAgents Taking a Listing with Solar Power

If you are a real estate agent who is taking a listing of a property with solar power, make sure that you share the information as soon as possible. This information should be included in the home specs, instead of waiting for it to come out in the appraisal.

The reason it is so important to know about the solar system is that we need to understand how the solar panels were financed. In the situation where it was paid outright, then there’s nothing to worry about because it’s an asset that adds value to the house.

If the solar system was financed, then it can get tricky. Get a copy of the financing agreement and provide that information to all parties involved, including the lender.

Buyers Purchasing a Home with Solar

When you are purchasing a home with a solar system, then you need to provide financing details to your lender as soon as you know about the system. Ask for this information from the buyer upfront. You might even request this information when you are submitting an offer.

Five Ways to Buy a Solar System

Understanding the different ways to buy a solar system will help you to know how the system will impact your transaction. Here are the five ways these systems are usually purchased:

  1. Cash: The least common way people buy their solar panels. This method will have no impact on the financing of a real estate transaction.
  2. Bank or Private Lender: Usually a clean transaction, but you will need a copy of the agreement.
  3. Lease: Again, a copy of the agreement will be needed.
  4. Power Purchase Agreement: You are swapping energy sources, and you don’t need to have the payment calculated into your lending paperwork.
  5. Hero or Pace: When the system is financed through a tax assessment.

The reason the financing agreement is needed is that the lender will need to calculate the monthly payment for the solar system into your debt to income ratio. Also, in many cases, the financing of the system will be listed on the title. So, that will have to be removed for the real estate transaction, and then put back on the property when it is under new ownership.

Do you have any questions about how a solar system will impact your upcoming real estate transaction? Contact us today, and we will gladly help with anything that you need!


Franklin Loan Center | NMLS 237653
Licensed by the Department of Business Oversight under the California Residential Mortgage Lending Act, 4131316
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