There is a lot of discussion regarding the sale of a Phoenix home with leased solar panels and whether or not it is even possible. In the Phoenix real estate market, there are about 100 solar homes that sell each month (+/- 10%) without any issues, hassles or problems. Hopefully with this article, Phoenix solar home owners can take relief in knowing that their solar system is actually an asset to the home selling process and not a liability.
In order to sell a solar home with a solar lease in the Phoenix area, the seller must find a buyer willing to pay an acceptable price and sign a written contract outlining the terms and the conditions of the sale. It is important that the Phoenix solar seller writes into his or her contract a solar lease contingency allowing for the solar lease to be transferred to the buyer at the closing of the sale of the Phoenix home. The solar lease contingency should address the type of solar sytem installed, the terms and conditions of the lease, the solar leasing company’s contact information, and any additional documentation that the buyer will need to provide for the solar lease transfer.
Also, Phoenix sellers have an obligation to disclose anything and everything that would be material to a home buyer’s decision to purchase the home. Unfortunately the standard Phoenix real estate disclosure does an abismal job in providing anything close to adequate in the way of describing and disclosing the details of the solar array, solar inverter, and the solar lease. As a Phoenix home seller, it is critical to add a solar lease disclosure addendum to the seller’s property disclosure statement (the SPUDS as we like to refer to it as) in order to give the buyer the necessary information and details about the solar system.
If the solar lease is properly addressed in the contract and properly disclosed on the property disclosure statement, there should not be any issues with the steps involved in the transfer of the lease. The problem for Phoenix area real estate agents, however, is that their standard real estate contracts do not address anything remotely close to a solar lease contingency or solar lease disclosure.
If you read closely to 90%+ of all of the complaints that people have had regarding the sale of their solar home with a solar lease, almost all of the issues are a result of the listing agent failing to disclose and negotiate the transfer of the solar lease, often times leaving the seller in the lurch and having to pay thousands in costs that could have been avoided if properly addressed.
But what about the credit score? I can hear that questions being asked by a few consumers out there. Having dealt with many of the solar leasing companies out there, if a buyer cannot qualify for a home loan, chances are that the buyer will not qualify for the solar lease. But even if you happen to be the longshot and have a buyer that does not have pristine credit, most solar leasing companies have backup options to explore before a buyer is completely turned down for the solar lease transfer.
Most solar leasing companies have been dealing with lease transfers for many years and have refined their qualifying criteria to include as many home buyers as possible. Many companies have lowered the minimal acceptable credit score while others have provided for a flat fee credit buyout if the buyer’s credit score is below the minimum acceptable credit score. Of course there is always prepay the remainder of the lease option…
I know that there are many factors that go into the sale of a home…price, condition, location, features, etc. Solar is just one variable out of a wide range of many variables that a home buyer will consider in the Phoenix area. And while those variables are critical to consider when selling your home, do not overlook the simple things that can delay or cancel the closing of your home if not properly addressed up front and in writing in the contract.
If you have questions about selling a solar home in Phoenix, give Rob Madden, the Solar Home Broker, a call at 480-888-1234.
Be sure to check out our step by step guide to solar lease transfers in Phoenix!