Does Solar Add Value To Your Home?

Yes, No, Maybe

My favorite answer. Frustrating at times but it is true.

Let’s dig down…

Leasing Solar- No

If you are leasing a solar system you don’t own it so it is not adding value to the home.  Even if the solar lease has been pre-paid. The savings you may see on utilities is a bonus to the resident.  But the solar panels when leased do not add value.

Purchased Solar – Yes and Maybe

If you own the solar, it does add value to the home.  You own it and it conveys with the property.  YEAH!

If you purchase Solar and pay the solar off up front, most definitely the solar adds value to your home.  If you paid $30,000 for your solar, don’t expect to get $30,000 back in value.  Remember you also got about 10% back in tax credits, reducing what your out of pocket really was to around $20,000.  Depending on the age of the system, and the KW production of the system the value added will be something around or more likely below the $20,000.

If you purchased Solar with a loan, and you are still paying on that loan, the value added is different.  Like above, you still received your tax credits and may have used them to reduce the loan balance, also reducing your payment.  That is delightful on your wallet, especially over time.  Until you have paid down the loan, and have more equity in the system, the value it gives your home is significantly less.  And as the system ages your equity increases… you are not likely to reach the same value given to the homeowner who pays for the system up front until the loan has been paid off.

See, Yes, No, Maybe

If you are considering Solar, give me a call I am happy to share my knowledge with you.

Irene 480-788-0171

Appraisals and your Mortgage

I went to a training today given on appraisals and your mortgage.  

Lenders, as a reaction to their losses in the sub-prime markets, are re-assessing their risk and making not only your loan qualification guidelines more strict but the guidelines for appraisers as well.  Maricopa county has been identified as a declining market. Our home sales prices have dropped in the county, with some areas hit harder than others.  This means the Appraiser is having to assess the sold price of the home down the street from 6 months ago with adjustments added or subtracted in for the market changes.  They are also required to have information about the current listings, the days on market and compare very similar properties.

The lenders have the same access as you to checking out approximate value: websites like Zillow offer Zestamates, but don’t consider all of the specifics of condition, location, upgrades etc in a home.  The Appraisers job is to look at all of the factors with each home and determine value. Two homes on the same street may be valued at very different amounts due to condition, lot size or position in the community. 

Foreclosure properties figure in as well.  If there is just a few in an area, the effect may not be as great to property values, they are considered in the appraisal process separately and adjusted.  If there are lots of foreclosures in the area, the foreclosures start to weigh in more heavily and effect the values of the community. 

Why share this with you?  When considering a home, or a community look at the whole community, not just the home as an individual house.  Your investment is in your home, and your home is in the community.  Once again, the magic words in real estate,  Location, Location, Location. 

Thank you Robyn Robertson of Suburban Mortgage, Anita Bell with TSA Title, and Scott Wortendyke with Instant Certified Appraisals for  the class.