There are federal tax credits for homeowners who install solar panels and they often significantly reduce electric bills. So why do some real estate agents prefer to list a house that doesn’t have them?
The industry experts we consulted say there are a number of reasons. Most agreed, however, that the typical agent views a home with solar panels as a more complicated listing. That’s because the person selling the home may still be financing the panels and their installation, which can cost anywhere from $10,000 to $30,000.
That loan must be either paid off at settlement or the loan must be transferred to the buyer.
“The real problem is that the majority of the homeowners get talked into financing the panels over a twenty year span,” Vivian Lehman, broker/owner at You Have Realty in Central Florida, told ConsumerAffairs. “They are told that the payments will be less than what they currently pay for electricity and will save money in the end. The cost of those panels just increased exponentially and does not equal the value an appraiser might give the home for the panels.”
The average homeowner sells their home every eight years. Lehman says if the home were to sell a couple of years after the installation, it might not appraise for financing purposes because of the remaining solar loan balance.
Here's where it can get complicated
Another complicating factor is if the current homeowner is leasing the panels instead of buying them. Yolanda Muckle, an agent with Long & Foster in Maryland, says she has encountered that a lot.
“All of the homes I've sold with solar panels, the new buyer takes on the responsibility of paying for the panels,” she told ConsumerAffairs. “The solar panel company requires them to get approved for the ability to take on the lease.”
Herb Bevywit, the owner and founder of Hungry Home Buyers in Scranton, Pa., tells us many agents and the buyers they represent don’t understand the technology and lack an appreciation of the potential savings. He says they have concerns about maintenance, replacement, aesthetics and costs.
“Personally, I think it's in a real estate agent's best interest to learn how to do a better job talking to home buyers about solar panels,” Bevywit said. “Buyers need to see and understand the value and many agents do a poor job at relaying that information correctly.”
Bevywit says if a seller is still paying for solar panels, that can be a complicating factor.
'Confusing'
“Unlike a home equity line of credit (HELOC), which is a more familiar concept and linked directly to a home's equity, ongoing payments for solar panels are seen as an added financial obligation,” he said. “While both require financial commitment, the unfamiliarity and perceived complexity of solar panels may be confusing for a buyer who isn't up to speed on green energy technology.”
Andrew Tanner, global real estate advisor at Premier Sotheby's International Realty, who owned a solar company before becoming a Realtor, agrees.
“If the system is presented in good light, meaning the listing agent has taken some time to know about solar, renewable energy and other green attributes - who would not want a lower power bill that the solar provides?” Tanner asked.
But Tanner concedes that some buyers can’t get past of aesthetics of seeing the solar panels on the roof and don’t think about the savings.
Interested in learning more about solar energy? You'll find facts and figures here.
