Recently, I was reading an article from the AZ Assoc. of Realtors about how we should advise clients for pricing their homes to sell when they have installed solar panels.
Let’s start with solar panels that are owned by the seller. Appraiser/Realtors are being instructed to add 4-6% of the market value to the home.
So what about leasing solar panels? Here’s the tough one for sellers to swallow; the leased solar panels do not add value of the home, instead they can actually reduce the home’s value! Why? Some buyers view the lease as a negative. According to Arizona Housing Expert Mike Orr, an analyst with ASU’s W.P. Carey School, he says leased solar power systems can detract 3 to 8 percent from the home’s value.
According to a recent article in AZCentral, several viewpoints are presented. The Appraiser view point is the one we need to pay attention to the most because it impact buyer loans – Fannie Mae has updated their requirements this year for Appraisers to follow. It states that leased panels cannot be included as part of the appraisal value. Why this is important: Government-owned Fannie Mae and Freddie Mac back nearly half of the home-purchase mortgages in metro Phoenix.
Take away before you lease – Your home value needs to be part of the financial decision as well as how long you plan to stay in the home.
Take away for Sellers who have solar panels on their home – Get good help! You will need a REALTOR who understands how to market cost savings to Buyers.