San Diego real estate agents learned tips for selling homes with solar energy systems during a seminar held at CSE on Monday, June 13. The #1 takeaway – Put as much information as possible about the solar system into the multiple listing service (MLS) remarks section.
Nationwide, home real estate transactions involving properties with rooftop solar electric systems are on the rise and can be complicated for buyers, sellers and agents when dealing with valuation issues.
CSE’s seminar featured a panel of local and nationally recognized industry experts presenting on solar home valuations and real estate transactions in the San Diego area. Speakers included experts on real estate sales, solar adoption, real estate appraisals, green building and financing, including solar loans, leases and property assessed clean energy (PACE) loans.
Ben Hoen, a researcher at Lawrence Berkeley National Laboratory, reported that studies show owned solar photovoltaic (PV) systems add a price premium to home sales, while further studies are needed to understand how solar leases or power purchase agreements affect home values. Such third-party owned systems represent the majority of residential installations nationwide.
Qualitative research conducted by Hoen and CSE staff in 2015 showed leased solar had a minimal impact on home sales among a small number of San Diego residences, either in terms of pricing or time on the market. However, buyers are often skeptical and unsure about how the lease agreement will be transferred or bought out. The study indicated that real estate agents play a key role in educating buyers about solar leases.
Tips for real estate agents
According to appraiser Rene Seabourne of Southern California Appraisal Services, MLS listings currently provide inadequate data fields for logging information on PV and other solar technologies. This means listing agents generally only mention that solar systems exist on a home for sale with no details, leaving buyers and their agents with more questions than answers.
Seabourne is among the real estate professionals who are calling for MLS listings to include solar details, but in the meantime, she recommends that selling agents and appraisers add specific information in the MLS remarks section, including
- Solar system size – number of panels and kilowatt capacity
- Estimated annual production – system output in kilowatt-hours
- Type of ownership – owned, owned with loan, leased or power purchase agreement
- Utility bill savings – either from utility or third-party system owner
- Photos – show the system as well as any energy ratings or green certificates
Sandra Adomatis of Adomatis Appraisal Service recommends owners or their representatives complete the Appraisal Institute’s Residential Green and Energy Efficient Addendum, an attachment to an MLS listing that includes solar as well as other green features, ratings and available incentives. She also urges real estate agents to read the two-page flyer Appraised Value and Energy Efficiency: Getting it Right and her book, Residential Green Valuation Tools, that explores high-performance home appraisals in detail.
View the seminar slide presentations online.