Buying a Home with Leased Solar Panels?

Reblogger John Meussner
Mortgage and Lending with Mason-McDuffie Mortgage, Conventional Loans, Jumbo Loans, FHA, 203(k), USDA, VA, NMLS #138061 MMCD #1141

Jill does a great job laying out some food for thought on solar leases.

 

This topic has become more and more important to residents of California and other places full of sunshine.  Solar panels have been made so easy to get, with solar companies promising the world, only for home owners to later find out how much of a hassle they can be.  Many times lease terms will compromise or make difficult the process of getting a mortgage.  I've created a flyer with how solar affects each mortgage type and what we need in order to loan on a home with solar.  

 

If you'd like a copy of the flyer just let me know and I'll be happy to send one over.

 

Solar Mortgage

Original content by Jill Murty, Realtor - Orange County, CA DRE #01485322

7 Things You Need to Know Before Buying a Home with Leased Solar Panels

 

Throughout Orange County, CA and beyond, many homeowners have added solar panels to their homes.  Leased solar panels are a popular option.  Find out how the seller's existing solar panel lease will impact your home purchase. 

 

  1. The buyer must agree to take over the lease on the terms negotiated by and agreed to by the party who initiated the agreement.  The seller will provide a copy of the contract for the buyer to read and review.  Read it.
  2. Have questions about the contract?  Contact the solar provider’s lease transfer department and they will answer questions regarding the solar lease agreement and transfer.  If you’re given information that is not in the contract, get it in writing.
  3. The buyer must qualify with the solar lease company to assume the lease, which is generally pretty easy.
  4. The buyer must inform their mortgage lender there is a solar lease in place, as it may affect the lender’s ability to lend on the property.  The lender will include the monthly cost of the leased solar panels into the buyer’s debt to income ratio.  Though unlikely, it may impact the buyer’s ability to obtain financing.
  5. What if the buyer doesn’t want the solar panels?  The cost to remove the solar panels can be the same as the lease buyout price.  Check the terms of the contract before you take action.
  6. In a buyer’s market, it’s possible to negotiate for the seller pay off part or all of the solar lease.
  7. Once the last lease payment is made, what happens next?  There may be a contractual requirement for the leased solar panels to be appraised.  Should the buyer wish to keep the panels, they will need to pay the solar company the appraised value.  If the buyer does not want to keep the panels, the solar company will remove them.  There may or may not be a fee for removal.

Buying a house with leased solar panels is a personal decision and each buyer must decide what’s right for them.  Consequently, it’s important understand that to which you are agreeing so you can move forward with confidence.

 

Written by Jill Murty and originally posted at JillMurtyRealEstate.com

 


 




 

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Rainmaker
1,460,459
Kat Palmiotti
406-270-3667, kat@thehousekat.com, Broker, Blackstone Realty Group - brokered by eXp Realty - Kalispell, MT
The House Kat

I have only had one buyer so far who wound up purchasing a home with a solar lease. It was a bit tricky but everything wound up working out fine. I'd much rather bring buyers to a home with solar that is owned.

Feb 15, 2018 10:55 AM #1
Rainmaker
1,021,773
Gloria Todor
Century 21 Absolute Realty - Springfield, PA
& Doug Durren (484) 431-3686 in SE PA

Good re-blog John. Solar panels are showing up here more and more also.  We have not had a deal yet with them but sure it will happen soon.  Thanks for info. 

Feb 15, 2018 11:47 AM #2
Rainmaker
796,641
Nick Vandekar, 610-203-4543
Long & Foster Real Estate Inc 610-225-7400 - Devon, PA
Tredyffrin Easttown Realtor, Philly Main Line

This will only be a growing problem as more people attach solar panels to their homes. In Europe we saw them everywhere on a recent visit.

Feb 15, 2018 12:56 PM #3
Rainmaker
1,967,568
Grant Schneider
Performance Development Strategies - Armonk, NY
Your Coach Helping You Create Successful Outcomes

Good afternoon John - this is certainly information worth sharing.  There are so many different solar arrangements.

Feb 15, 2018 02:21 PM #4
Ambassador
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George Souto
George Souto NMLS #65149 FHA, CHFA, VA Mortgages - Middletown, CT
Your Connecticut Mortgage Expert

John so far I have only done conventional loans on homes with solar panels, and they have not been to bad once we get the right disclosures from the solar panel companies.  FHA has been a much different experience, and have not been able to do one.  I have not had a VA Borrower purchase a home with solar panels, so I am sure that will have its challenges when the time comes.

Feb 15, 2018 04:14 PM #5
Rainmaker
363,385
Jill Murty, Realtor - Orange County, CA
PREA Realty - Laguna Niguel, CA

Thanks for the re-blog John Meussner!  Nice useful flyer, too!

Feb 15, 2018 09:09 PM #6
Rainmaker
1,525,552
Amanda S. Davidson
Amanda Davidson Real Estate Group Brokered By eXp Realty - Alexandria, VA
Alexandria Virginia Homes For Sale

John, I like your flyer, that was a great idea. I've yet to come across a home with solar panels - leased or owned but, I wonder if part of that is because HOA's deny them here. I can see why they're popular in CA.

Feb 16, 2018 05:05 AM #7
Rainer
347,521
Raymond Denton
Homesmart / Evergreen Realty - Dana Point, CA
Capo Beach Realtor® - www.CapistranoBeachHomes.com

That flyer would be awesome, John, can I have one?  I've never seen the four loan types with their respective solar guidelines on a single page before.  What a terrific reference page - seems I'm always getting confused as to which guidelines apply to which program.

Mar 01, 2018 02:21 PM #8
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