Let’s talk about selling your house with solar panels in Arizona with ease.
Selling a house with leased solar panels certainly adds a layer of complication to the process, but don’t let it scare you! By the end of this blog post you’ll know exactly how to prepare and what the process is.
If this is your first time here, welcome! If you’ve been here before, thank you so much for coming back and spending your time with me. My name is Lindsay and I‘m proud to be your Anthem, Arizona REALTOR® with the Wise Move AZ Team at Realty ONE Group. On our YouTube channel and blog we have a lot of fun talking about all things Anthem and real estate every single Thursday, and we absolutely love having you along for the ride.
Leased Solar Panels
Before we jump in, I want to be clear that this video is tailored to sellers in Arizona who have leased solar panels on their home that will convey to the buyer in the sale. If you are fortunate enough to own your solar panels outright, know that your process will look a little bit different, but you are absolutely more than welcome to stick around.
Buying a Home with Leased Solar Panels (Rather than Selling)?
On the flip side, if you are a buyer that is considering purchasing a home with leased solar, you are going to want to click and watch this video, instead, as it handles the process from the buyer’s perspective.
Now that we’ve got that cleared up, let’s dive in to these 6 tips to assist you in selling your home, as it pertains to your solar lease!
Tip #1: Use the AAR Solar Lease Addendum
If you’ve watched our videos in the past, you’ve probably heard me talk about just how much I LOVE the forms that Arizona Association of REALTORS® puts together. They are incredible resources! The proper name for this form is the Solar Lease/Solar Loan Assumption Addendum. Try saying that 3 times fast…
Anyways, this two-page form is designed to protect the Buyer and the Seller by clearly laying out their contractual obligations where the assumption of a solar lease is involved.
This document lays out the timelines that both parties will be required to adhere to, recommended due diligence for the Buyer, and resolutions for possible problems that could crop up as the result of the Buyer trying to assume the lease.
Sample Solar Lease/Solar Loan Assumption Addendum
This Addendum is essential when selling an Arizona home with leased solar panels, so make sure that is incorporated into your purchase contract. I won’t bore you by reading it here, but I have dropped a link to a sample copy of the form here and encourage you to download it and read it on your own time.
I strongly recommend that you sign this document with your agent, whether that’s us or someone else, at the time you are signing your listing package. This way, your agent can provide it to any interested buyers BEFORE they submit an offer. When you do receive an offer to purchase your home, make sure that the appropriate box is checked to incorporate this addendum into the contract.
Tip #2: Compile your Solar System Documents
As outlined in the Solar Lease Addendum, the Solar System Documents include the following:
- The most recent version of the System Lease/Loan
- Any other Solar System documents in your possession
- The name and phone number of the Lessor. The Lessor is usually the solar company, like Tesla, for example.
Please do yourself a favor and compile all of this information before you list the property for sale. It will save you the hassle of rushing around trying to find it when you’re under contract and the timelines are tight. If you are having trouble locating the documents, you may want to reach out to the Lessor directly.
What the Buyer Wants to Know
Put yourself in the Buyer’s shoes. Do the documents you’ve compiled answer the questions they are likely to have about the system? Buyer’s most likely want to know about the following:
- The age of the system
- How well the system has been maintained
- Monthly fees and how they change over time.
- Any transfer fees
- The nature of the grid tie-in
- The lease terms
- Any output and production guarantees
- Any warranties
Most of this information can be found directly in the lease agreement. If you have maintenance records, put those together too. Lastly, I strongly recommend that you put together a year’s worth of electricity bills. This way the buyer has an idea of what the cost will be above the lease fee. If you happen to have copies of bills before the solar was installed, that can be really cool for the buyer to see as well. If not, don’t worry.
Tip #3: Service & Clean your System
Does the Lessor provide regular servicing for the system? If it has been a while, reach out to them and ask them to come out before you list the property, just to ensure everything is running as it should be. Additionally, I recommend that you clean the panels before listing. If you are used to cleaning your own panels, great. If not, hire someone to jump up there and to it for you. The buyers want to know that they are assuming a loan for a system that has been loved and cared for.
Tip #4: Contact the Lessor
Speaking of the Lessor, even if the system has recently been serviced, I recommend that you give them a call. Let them know that you will be selling the home, and take the time to learn a little bit about the process on their end.
Is there anything they need from you at this time?
Can they get a jumpstart on the paperwork?
The more we can do to keep everyone on the same page during the transaction, the better.
Tip #5: Know your Timelines
As with any part of the real estate transaction, it is really important to know and understand your timelines. If you are working with a REALTOR®, they will be watching all of the timelines closely for you. It’s kind of our thing!
With respect to the solar system, there are a few dates you need to watch out for:
- The Seller has 3 days after contract acceptance to deliver all of the Solar System Documents to the Buyer.
- The Buyer can disapprove of any items within the Solar System documents within 5 days of receipt, or within the inspection period, whichever is later.
- Buyer must obtain Lessor approval to assume the Solar Lease/Loan no later than 3 days prior to close of escrow.
Your REALTOR® will be able to walk you through the ramifications of what will happen in the event that any of these timelines are not adhered to, on a case by case basis. That being said, as the Seller, your biggest obligation is to deliver documentation related to the system and make the home available for inspections. If you have all of the documents ready to go before you even list the house, it will be a breeze!
Tip #6: Check your Listing
In Arizona, as a part of the documents you sign when listing your home, your agent, whether that’s us or someone else, will have you sign off on what is called the Residential Input Form. This is basically a ‘sneak peak’ of what your listing will look like in the MLS, minus the beautiful photos. Yeah, okay, it’s not as exciting as it sounds.
While there is a lot to review in this document, I want you to make sure that it is clear that your home has leased solar. I recommend that your agent includes a copy of the Solar Lease/Loan Assumption Addendum that you signed in the documents tab. I also recommend that they consider including a note in the private remarks section, which is visible to other agents, that all offers must include the Solar Addendum at the time of offering.
Again, we just want to make sure that any potential buyers are fully aware that they will need to qualify for and assume the lease to the system.
So, there you have it! All of this can be done fairly quickly, and if you invest the time up front, it will make everything easier when your buyer does come along! As I mentioned before, if you’re interested in familiarizing yourself with a sample copy of the Solar Loan Assumption Addendum, click here.
Lastly, if you want tips on getting the rest of your home ready to sell in 30 days or less, click here, or if you are wondering if you should accept a contingent offer to purchase your home, click here.
Enjoy those and I’ll see YOU next Thursday!