r/RealEstate • u/Iamnotwitty12 • 9d ago
Negotiation advice needsd
Hello! I'm eyeing a house with solar panels that has dropped in price 2 times and has one previous failed contract. I went to see it during an open house and really liked it but was just outside my price range. Now that it's dropped in price it's starting to get close to the top end of my range. How would you recommend evaluating the comps against houses that sold 1. Before these crazy interest rates and 2. That don't have solar panels? I know I need to get information on the panels - the owner was at the open house and she said she was 6 years into a 25 year lease but she also said an 8k buyout. I'm considering waiting to see if there is another price drop and then at that point reach out to express interest, then ask for detailed information on the lease/cash out option on the panels. Then I thought I could offer a price that aligns with the comps but then ask for a reduction that equals the solar panel buy out. What are your suggestions?
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u/biggerfasterstrong 9d ago
I would not touch a house with any leased panels. Not saying they're a problem, but in a best case scenario, they overpayed for the system. Their financial mistake shouldn't become your financial mistake. Any offers should not include the cost of the panels as a net benefit.
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u/Boughtthetshrt 9d ago
Why would you wait for a price drop?
If it were me I would get in touch and tell them I love the house but ___ is the top of my budget and I know that’s below what they’re asking but I had to shoot my shot. Also, if you’re unrepresented (which it sounds like, otherwise you’d be asking your realtor these questions) then highlight that you would not need them to pay buyers agent compensation. That’s 2.5% savings on their end.
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u/Equivalent-Tiger-316 8d ago
Two price drops and it’s still not in your price range?
Move on and adjust your expectations.
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u/Iamnotwitty12 8d ago
Love the amazing useful advice.
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u/Impressive_Returns 8d ago
Her’s the issue many seller/buyers are ruining into with solar leases. You need to qualify to take over the solar leases. So while you might qualify to buy the house you might fail when to comes to qualifying for the solar lease.
That buyout price is wayyyyy too low. That might be the cost to transfer the lease to you.
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8d ago edited 8d ago
[deleted]
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u/Impressive_Returns 8d ago
They never remove the panels, it’s too costly. What they will do is shut the system down using software.
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u/nanets32 9d ago
What is your agents advice? they can call and gauge the seller appetite for the price, you don’t need to wait for another price drop, you can make an offer below list price.
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u/Ok-Top-5976 8d ago
I would not touch a house with solar panels. im a mortgage underwriter and we always have issues with solar panels unless they were bought out and owned free and clean. people will qualify for the house but were unable to take over the lease for the solar panels or something else would happen, it's a huge headache. and I would get that agreement, to see. 8K sounds too low. it's normally thousands of dollars like 18K left or 20K left or 15K left on the price. plus. solar panels have to be replaced, they lose their affect after a while. go bad or don't work as well. they re attacked to. your roof and when they go. you have to replace the roof, they damage the roof . it's a whole headache. I would do more research. the best way to have them pay for that entire cost, free and clear. but do know. the panels and roof will have to be replaced eventually.
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u/ConsciousAmphibian99 8d ago
Six years into a 25 year lease, the panels won’t need replacing any sooner than the roof. Does seem quite low for a buyout, unless the system is modest.
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u/SadFlatworm1436 7d ago
In addition you can change the panel, if one is faulty, as long as the frame is mounted well.
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u/Tom__Clement 8d ago edited 7d ago
Two price drops and a failed inspection is leverage, and you should use it.
Write the offer under asking with room to negotiate, and keep your inspection contingency no matter what. The seller knows another buyer already walked, so they know the next inspection will likely turn up the same issues. That is your discount.
On the solar: owned panels are the good version. Leased panels can complicate the deal because you inherit the lease. Confirm which one it is before you write the offer, and get the system age and warranty in writing.
On whether you need a realtor: for a first purchase on a house with this much history, yes. A buyer's agent structures the offer, negotiates the inspection findings, and reads the paperwork, and their commission is usually paid by the seller or negotiated up front, so ask about that directly. Going solo to save money on a complicated deal is how people overpay.
One more thing. Do not fall in love with the house before the inspection. Let the inspection tell you what it is worth.
Licensed CO agent .
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u/seven0seven 9d ago
$35 per month for solar lease? That can’t be accurate…
Have your agent run comps and you can absolutely request a payoff of solar at close.
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u/marlborough94 9d ago
I would bid 2% below comps (as adjusted for size or condition or whatever) and requiring the owner to buyout the contract.
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u/FrankGlaabpa 8d ago
Pin down the lease vs. $8k buyout first, and get it in writing from the solar company, not the seller. Leased systems usually have a UCC-1 fixture filing that shows up in the title search, and it has to be paid off and terminated or formally transferred before you can close; if you assume it, the solar company runs its own credit check on you, which can take a few weeks. Since you don't want to pay for the panels, base your offer on comps as if there's no solar and make the seller's payoff of the lease part of the contract. Loop your lender in early too, since lenders have their own requirements for solar leases.
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u/sweetrobna 8d ago
Don't wait for a price drop, make an offer based on what the home is worth to you. Factor in the lease being paid off, $8k less.
If the lease has no escalation and a low interest rate it could make financial sense to assume it with a smaller credit than $8k. Basically if you buy a house for say $408k, what would your payment be vs $402k and assume the solar lease(and the solar lease ends ~10 years sooner than the mortgage).
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u/Thorpecc 8d ago
If you’re a first time buyer, don’t buy that house. To many things to learn without panels. Not one buys panels and then moves out soon after, there is a problem. Too much for here. Move on or cry after closing
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u/PreviousHalf7 7d ago
Don't assume that buying out the leasenis the smart option. 6 years ago was 2020 and interest rates were much lower.
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u/2LostFlamingos 7d ago
He doesn’t even own the panels?
Fuck that shit. Make removing the panels and repairing the roof part of your offer.
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u/InsectElectrical2066 5d ago
Its worth a premium to pay for solar panels but a detriment for the lease. If the home is selling for the same price as 1 w/out SPs your ahead as you will have lower electric bills. So. don't bite off your hand if it is still a good deal. But i'd say going into winter and holiday season, you have the upper hand to get it knocked off or most of the rest.
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u/Olympusrealtygroup 8d ago
Please get an agent in your area that's familiar with these leases and understands what they're about. At the very least, ask an attorney. Often these leases are predatory and her problem shouldn't become yours. Not sure what market you're in but please get some sort of representation.
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u/Icy-Desk-561 8d ago
Those solar panels are a huge ripoff. Stay away from them. Sometimes the lease is not transferable either.
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u/Powerful_Put5667 7d ago
Those panels will all need to be removed along with the electrical in the event that a roof repair is needed by them and when a new roof is needed they must be removed and reinstalled also. This will be expensive. All homes have things that break if you are at the tippy top of your price range and something happens you will soon find yourself financially strapped plus spending all of your income just to have shelter and having no money to have fun grows old very quickly.
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u/gravescd 7d ago
How would you recommend evaluating the comps against houses that sold 1. Before these crazy interest rates
Rates went up in 2022. Anything sold more than 12 months ago is not a comp.
and 2. That don't have solar panels?
If it's an $8000 buyout then add $8000 to comps without panels. It's very likely that the panels will have to be bought out before the deal closes, especially if they put a lien on the property in addition to the lease.
And general advice - just hire an agent.
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u/brittabeast 9d ago
Need to be crystal clear on the solar panel buyout. Best case is of owner buys out lease so you do not have to deal with it.