AGENTS: What You Need to Know About Solar Panels
Yesterday, I received a call from an old friend who recently became a real estate agent. After catching up, she asked me if I’ve ever had any experience with solar panels. She explained that she was working as a buyer’s agent and recently showed her customers a property that had solar panels installed on it. Her clients really liked the house but had some concerns about the look of the panels as well as how they operated and what maintenance they required. After addressing their concerns about appearance and functionality, my agent friend inquired about the financial arrangement with the solar company. The sellers shared that they were being financed with an option to purchase the panels after twenty years. The sellers were also under the impression that they could transfer the financing to the new owner. Being new to the industry, my agent friend was unsure if this could be done.
I suggested that my friend check the title to the property to see if the solar company recorded a UCC filing, or lien, on the title. If there was filing, she would need to confirm with the solar company that the financing was transferrable and whether they would subordinate their lien to second position with the new owner and their mortgage would become first lien. Her response was puzzled silence, so I decided it to cut through the legalese and lay it all out in plain English.
Obviously, if you’re an agent representing the buyer, you’ll want to first confirm that the panels do indeed exist. As we all know from experience, not everything a property owner promises turns out to be true. Your next step is to ascertain what the financial arrangements are with respect to the panels. Should your client want to assume that contractual obligation, get a copy of the original financing paperwork from the seller to verify what they represented. Finally, consult with an attorney who can read and understand financing statements and investigate the title-related recording information.
If you’re a listing agent you’ll need to consider your opinion on solar panels. There’s really no right or wrong answer, but you need to be true to yourself and your clients, when it comes to your thoughts on whether solar panels harm or increase a home’s value. If you do decide to take on a property that has panels, be sure that you get any and all paperwork on the financing arrangement and confirm the current status of that arrangement. You’ll want to present this information upfront to all interested buyer agents.
Regardless of what your opinion on solar panels might be, it’s increasingly likely that you will encounter them in the course of your business. Luck favors the prepared, so be sure to do your homework on this emerging trend in home technology.