Does Solar Add Value to a Home in Phoenix?

Solar home sales are increasing every month and now report for at least 8% of all of the home sales throughout the Phoenix area. With hundreds of solar homes selling each month, many solar home owners throughout the Phoenix area are wondering if solar adds to their property’s value.

Having been in the real estate industry for the last 29 years and focused on selling solar homes for over 12+ years now, the simple answer is yes, solar can raise your home value if you follow a few simple steps to make sure you get the most value out of your home when you sell it. With millions of dollars worth of solar transactions over that period, no two transactions are alike and no two homes are the same. I have found the one common denominator in all of these transactions is me, coming in with a lot of solar real estate experience, training on marketing and valuing solar homes, and insight on how to properly guide my solar home sellers to get the most value for their property.

How To Get Full Value For Your Solar Home

My track record has shown that I have had homes sell for more than the area non-solar homes and in the same amount or even less time. There are seven key steps as a solar Realtor that I take to make sure that the solar panels add value to the home.

7 Steps to Added Value for Solar Homes

Research the make, model and efficiency of the solar equipment
Analyze the true cost of energy production versus the aggregate amount of solar savings generated from the solar panels
Have an independent third party certify the solar system (used for both sales marketing and the appraisal)
Create a detailed broker price opinion of value based upon the home and its features in relation to non-solar home sales in the area
Design solar specific marketing material to demonstrate and educate the buyer on the benefits and cost savings from the solar panels
Require the buyer to hire a certified green appraiser that understands solar when having an appraisal done on the home
Personally meeting the appraiser at the home during the appraisal to give them a detailed solar report that includes information about the solar system, energy production, cost off-sets and utility usage reports, form 820.06 Green and Energy Efficiency Addendum for the appraisal (filled out by an independent third party) and relevant comparable home sales data.

The key to getting full value for your solar panels is hiring the right solar real estate agent when you sell your home!

The average solar home in Phoenix only receives $1500 in extra value because sellers fail to take the right steps for max solar value.

In my experience, most sellers do not fully understand the benefits or function of their solar panels on their roof. Now, imagine having home buyers come through their home that have had solar…and just telling them that it saves $100 a month (or whatever that figure may be). Who is guiding that seller and buyer to ensure that not only the buyer recognizes the value of the solar panels on the roof but also the third party professionals such as the home appraiser or mortgage lender that are basing financial calculations on the value of the solar home? You need an experienced and qualified solar real estate agent to guide you through the process. Otherwise, you are just a solar guinea pig training a real estate agent on the do’s and don’ts of how to sell a solar home.

With over tens of millions of solar real estate sold and millions more in regular real estate sold in the Phoenix area, I have helped many home owners realize higher equity returns on their solar with an average of $1.65 to $2.78 per watt, depending upon the size and age of the solar panels and inverter. No two solar homes are alike but I know I can help you too.

Give me a call at 480-888-1234 and let’s talk about getting the most value for your solar.

How a mortgage affects the sale of a home in Phoenix.

Owning a home adorned with shiny solar panels in sunny Phoenix is an exciting prospect. But, hey, we get it! The financial side, especially understanding mortgages and loans, can be a bit tricky. Let’s explore, in straightforward terms, how different loan options work for purchasing a solar home in the Phoenix area.

Conventional Loans: Your Everyday Mortgage

These are your standard loans, often used by many. They’re guided by rules set by Fannie Mae or Freddie Mac, which are entities that buy and package mortgages. Fun fact: You can snag a conventional loan by putting down as little as 3% and choose between a 15 or 30-year payoff plan. Additionally, solar lease payments are not added to your qualifying ratios (though a solar loan payment would be added unfortunately).

When it comes to homes with solar panels, there’s a special form (the “Residential and Green Energy Efficient Addendum”) that appraisers use if the solar system is owned and not leased. A tiny hiccup to keep in mind: if you purchased solar panels under the PACE program (specific to California), Fannie Mae won’t back the loan. But since we’re in Arizona, no worries there!

FHA Loans: Friendly and Adaptable

FHA loans are known for being user-friendly with flexible rules. The Federal Housing Administration (FHA), a part of the U.S. Department of Housing and Urban Development (HUD), ensures these loans. They’re renowned for their lower down payments and more lenient guidelines.

When solar comes into play, FHA has cool specifics. They allow mortgage amounts to go beyond 20% of the max allowable FHA home loan if that excess is used to install a solar system. Plus, with an FHA Energy Efficient Mortgage (EEM), you can finance up to $10,000 for energy improvements (like solar panels) with as little as 3.5% down.

Another neat offer from FHA is the Title I loan, providing funds for energy improvements even if you’ve not much equity in your home. Although rarely used for initial home purchases, it can be a boon for existing homeowners in Phoenix wishing to shift to solar without leasing.

VA Loans: A Salute to Service

Here’s a shoutout to our military veterans! VA loans are tailor-made for you, requiring no money down and are, in general, a fantastic deal.

When we bring solar into the picture, VA has specific guidelines, notably in VA Pamphlet 26-7, regarding how solar systems are valued and qualified. Similar to other loan types, if the solar system is a permanent part of the home and not leased or financed, it adds value.

VA also has an energy-efficient mortgage, but it’s worth noting that it’s not commonly offered by most lenders in Phoenix.

In a Sunbeam: The Link of Loans and Solar

Regardless of the loan type, Phoenix has proved to be a sun-drenched paradise for solar homes. However, diving into the financial aspect, particularly loans, requires a little light to be shed on the intricate details.

Through the lens of conventional, FHA, and VA loans, potential solar homeowners can navigate the sea of financial jargon and lay the foundation for their luminous abode in the vibrant heart of Arizona.

The takeaway? While each loan type has its unique shades, the underlining fact remains that turning your home into a beacon of sustainability with solar is certainly plausible. And with the right financial route, you can bask in the glow of both the sun and smart, future-proof investment in a solar home in Phoenix.

Does Solar Increase Your Home Value in Phoenix