Sell A Solar Home in Phoenix
Solar has gone from a relatively new phenomenon in the Phoenix real estate market to a market staple accounting for over 6% of the total sales. Unfortunately most real estate agents are ill prepared or unprepared to handle some of the challenges that solar offers. Essentially there are 6 primary issues that need to be properly addressed by the real estate agent: 1) properly pricing a solar home, 2) marketing a solar home, 3) dealing with financing a solar home, 4) handling disclosure requirements with solar, 5) handling inspection issues with solar, and 6) overseeing the transfer of a solar lease. Failure to properly advise a seller and/or buyer with any of these six issues could result in lawsuits, loss of a buyer, additional time it takes to close, and the headaches associated by their incompetence. As a solar home seller in the Phoenix area, be prepared and ready so that you can avoid any of the potential issues.
Pricing Your Solar Home
Solar electrical systems can potentially add thousands in additional value to a home. While I will not cover pricing in great details here, it is important to note that all types of solar can add value to a home, not just a system that is owned by the home owner. In some cases solar leases and prepaid solar leases have been shown to increase the value of a home in the Phoenix area. Remember that solar is not a primary search variable for the typical home buyer but do influence a buyer’s decision to purchase when compared to similar properties. Think like a buyer when pricing and remember to use accurate sales comparables that are similar in size, condition, features, and amenities. Know the market and whether prices are going up or down and stay ahead of the market curve. For more information on pricing, read my article on Pricing Your Solar Home For Sale.
Marketing Solar Homes
No where in the real estate licensing exams are there questions regarding solar and how to sell a solar powered home in the Phoenix area. Marketing is the crucial step in selling that brings potential buyers through the door of your home. Without foot traffic through the door, you are wasting your time in trying to sell the property. Your marketing should take on a three tiered approach – traditional home marketing, internet marketing, and green marketing. Traditional marketing focuses on those tried and true practices that real estate agents have employed over decades including signage, flyers, mailers, and open houses. Internet marketing provides for the 24/7 presence of your home on the internet, whether it is through a single property website, email marketing to real estate agents, or featured listing on Realtor.com for example. Green marketing allows you to maximize the benefits of solar and put it in terms that potential buyers will understand and appreciate while differentiating your house from the rest of the home for sale on the market. Green marketing can be integrated in the other types of marketing but is necessary to fully maximize the value and marketing potential that solar can provide.
Financing Solar Homes
In the Phoenix area, roughly 3 out of 4 solar home buyers financed the purchase of their home. Depending upon the type of solar system on your home, mortgage lenders may have guidelines that could affect the buyer’s ability to buy your solar home. Be sure your real estate agent knows how conventional, FHA, and VA guidelines affect the sale of a home with solar and how to navigate around any potential hurdles that could hinder the sale of the solar home.
Solar Home Disclosures
Even with updates to the standard seller property home disclosure, solar is a mere line item disclosure comment that fails to fully inform a potential buyer about the basic configuration let alone the savings that the solar provides the Phoenix homeowner. I am surprised we have not heard more about this topic in the news but I am sure there will be a host of issues coming up in the future if real estate agents are not proactive about properly disclosing to home buyers about the type of solar system, the condition of the equipment, and the costs associated with the solar array. The standard real estate purchase contract does not have a requirement of the buyer to assume a solar lease if one currently exists on the property unless the proper solar lease/loan assumption addendum is used. If selling your home, be sure to properly disclose your solar system, provide for disclaimers stating that past performance is not a guarantee for future solar performance, and include a contingency in the offer for the buyer to review and apply to take over the existing solar lease. Fortunately for me, I have already created documents for the purchase contract and seller property disclosure that provide additional protection for home solar home sellers.
Solar Home Inspections
Home inspectors do not inspect solar panels or any of the attached solar electrical equipment like an inverter, wiring, racking, etc. Besides needing to disclose the basics about your solar system, what happens if it is not operating as it was designed to do? The real estate contract provides general language covering electrical issues with the home but what about solar? What happens if the solar system stops working six months after closing. I can guarantee that you will be receiving a phone call from an attorney if the air conditioner stopped working and cost the home buyer thousands of dollars if it stopped working shortly after closing…is solar really that much different? You need a real estate broker that can help limit you with these issues before they become one.
Solar Loan or Solar Lease Transfer
Having worked both the buying and selling end of a solar lease transfer, most real estate agents are unfamiliar with the process of transferring a solar lease. Most fail to start the process BEFORE the home goes on the market. Many do not realize that the solar leasing company’s UCC-1 filing can cloud the title of your home and potentially delay closing. Furthermore, solar loan transfers require the buyer to qualify for the loan transfer and could affect their ability to qualify for the home loan as well. These are just additional steps to selling that if approached properly and proactively, do not hurt the sale of your home. Failure to understand the steps involved and proactively approaching the different phases of a solar loan or solar lease transfer can hurt, delay, or even jeopardize your home sale. Having a real estate broker that understands these steps just simplifies the process for you and your home buyer.
Overall, the key to selling a solar home in Phoenix is making sure you have a competent and qualified Realtor working for you that knows the ins and outs of solar. Fortunately the Solar Home Broker is a licensed and solar trained Realtor in the Phoenix area that can help you sell your solar home.