Full transcript of “NEVER Buy a House With Solar Panels”. Click a timestamp to open the video at that moment. Need another video? Use the YouTube transcript generator.
0:00 I'm currently working with several buyers right now, and you would think they would be excited to find a house with solar panels. I mean, low electric bills. I mean, who wouldn't want that? But think again. Some buyers are actually walking away from homes with solar panels once they learn the details and what the true costs are. Now, this does not mean that every home with solar panels is a bad idea, but there are a few situations where these solar panels can cause some serious complications for buyers, and most people don't realize it until they're under contract. In this video, I'm going to give you the reasons why you should never buy a house with solar panels. Solar panels became super popular in the 2010s, and by 2016, the US surpassed 1 million homes with solar panels. So, this was a big thing. people
0:46 wanted to save on their electricity bills and look, I'm here for it. I get that. Also, many people were giving government incentives and tax credits for putting solar panels on their house. And then you had those aggressive solar companies that were pushing that whole dream of never having to pay for electricity again. So, this is why they became so popular. But now, here we are 10 years later and now a lot of these homes are hitting the resale market and they're starting to become a little problematic. According to a study that was done by Rocket Mortgage back in 2022, it showed that 67% of non-solar households were interested in solar. So, this is just showing you how popular they are. Some other interesting findings that they showed in the survey was that home listings with solar spend 13.3% less time on the market and are 24.7%
1:32 more likely to sell over ask. So, that was very interesting to read that. Now, why are homeowners interested in solar? right here, 90.7% say they want the lower electric bill. So, this is the biggest draw as to why people are putting solar panels on their house. And according to this other article, solar panels are a proven asset when it comes to increasing property value. According to a study conducted by the US Department of Energy's Lawrence Berkeley National Laboratory, homes with solar panels sell for approximately 4.1% more than comparable homes without solar. For a $400,000 home, that's an additional $16,400 in resale value. So, you can see why these are attractive to homeowners
2:17 because of the savings in energy costs and because of the increase in home values. But keep in mind that's only if those panels are owned. So the first reason why you should never buy a house with solar panels are the solar leases. Many homeowners do not own these panels. And the leases run 20 to 25 years. So these leases are basically to a third party. There's companies called Sunun or Vivant. So you're paying a monthly payment to these companies to rent the energy that these panels are producing. And some solar leases will have a riser in the agreement, meaning that they can raise the monthly payment by say 3% every year during the lease. Not every lease has this, but some of them do.
3:02 Now, because of these leases, it could lead to other problems for buyers. If you are getting an FHA or VA loan, any governmentbacked loan, you could run into potential issues with getting that loan approved. If you're buying a house of solar panels, you could run into lean and title issues with these panels. Binance solar panels usually involve a UCCC1 filing. That's known as uniform commercial code. That acts as a lean on the property. Now, FHA lenders are going to require that lean to be satisfied or subordinated, meaning being placed behind that mortgage to ensure that they have the first lean position. So, in case the buyer defaults on their mortgage, they're the first ones to get paid, not for that lean, which is the lease for the solar panels. If you decide you're going to assume that
3:49 lease, there could be complications with the loan because that contract must be transferred to you directly. And if that lease is not assumable, that has to be paid off by the seller prior to closing. It could also impact your debt to income ratio. The monthly payments for these leased panels are going to be included in your DTI. And if your DTI is already high, that monthly payment could throw it over the edge, therefore disqualifying you for the loan and you'll get denied. Solar panels can also impact the appraisal in value. Now, while fully owned panels may increase the value of the home, the lease panels will not because that's considered personal property and that could complicate the appraisal. Another reason why you should never buy one and and what's scaring buyers is the potential roof problems and repairs. Sometimes
4:35 these panels will cause damage to a roof, therefore causing leaks in the roof. And then what happens? Then you have to remove the panel, repair the roof, put the panel back on, it gets expensive because you have that added step now of removing the panels. So buyers don't want to be dealing with that. So whether you're thinking about buying a house with solar panels or just buying a house in general or even selling a house, but you don't have a great real estate agent to work with, I got you covered. I can get you connected to a real estate agent in your market. Simply scan that QR code, click the link down below in the description box, answer the questionnaire that is emailed to you once you fill out that form. Fill it out thoroughly so I can get all the proper information to help find a great
5:20 agent for you in your market. Another reason why you don't want to be buying a house solar panels, it's my favorite topic. Let's talk about homeowners insurance. you might have an increase in your homeowner's insurance to cover the cost of the replacement of these panels should they get damaged. Now, some leasing companies will insure the panels themselves, but you have to make sure about that if that is not the case and they require you to get your own insurance to ensure those panels. That's going to cost you. It's going to cost you. That would be another big reason why I wouldn't buy one, cuz who needs more expensive homeowners insurance? All right. Now you're ask, you're probably wondering when can solar panels actually be good. The only time I would consider buying a house with solar panel is if the panels are owned outright. There is
6:06 no lease left on those panels. I would also consider it if the roof is in good condition and if the system is a newer system. That would be it. If you have to assume that lease, there are going to be some problems. It's going to be an extra cost to you and you may have a problem getting a loan. So these are things you really got to take into consideration. Okay, so let's do a recap. So what should buyers be asking if they are interested in buying a house with solar panels? Are the panels owned or leased? That is the number one question you need to ask the homeowner. What is the remaining lease term if they are leased? What are the monthly payments? Who pays for the repairs? And what happens if the roof needs replacement? Okay, these are important questions. So, the homeowner
6:53 should be able to answer all of these for you because they had to get all this information when they were putting the solar panels on the house. So, they should have all that information at the ready for you. Ideally, what you would want is if there's time left on the lease, which I'm sure more than likely there is going to be some time left because again, we're only 10 years into it. If so, if we go back to 2016 where the biggest boom was and most people put solar panels on their house and we're 10 years into it, more than likely there's going to be another 10 to 15 years left on that lease. So, you could ask the seller to buy out the remaining term of the lease that you don't want to take that on. Now, once you close on the house, if you're not a fan of the solar panels, you absolutely can take them down. Now, the cost to remove the solar panels, doing my research online, I'm seeing that it's about an average of
7:39 about $1,000 for the company to come in to remove the panels, but you got to take into consideration if there is damage to the roof after they're removed, who is going to repair the roof. You should verify all of that information before you close on the house. If you know you're going to remove the panels, make sure you find all of that out. How much is that going to cost you? You could also ask the seller to issue you a credit or have them remove it. If they already own the panels and you don't want it, you can ask them to remove those panels prior to closing. Now, again, solar panels aren't automatically a bad thing, but they are becoming a big concern for home buyers because of the extra cost of them. Now, yeah, are you saving money in electricity? Absolutely. But when you
8:26 add in your lease payment and your rise in insurance, if the company's requiring you to insure those panels yourself, it can get quite costly and buyers just don't want to deal with that. And if you want to know the types of homes you should never buy, you should watch this video right here. Thank you so much for watching me today to get your dose of real estate reality. My name is Jackie Baker and I will see you next time.
