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Yes they accepted our offer for the house on August 17th. Then on the 30th we heard about the debt that comes with the lease. And this comes after I call the solar company's number and find out they are out of business, read Yelp reviews on them, and then asked my agent a bunch of questions. This dragged out all week.
The company was ASD and the reviews are baaaaad.
So you got the disclosure that informed you of the lease on August 30? Again, that doesn't seem right to me. Disclosure requirements differ from place-to-place but where I am you need to make all of your disclosures before the buyer makes their offer so that they're making an educated offer.
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Originally Posted by TheLonelyGoatherd
So even though they accepted our offer on the house, now we have to negotiate this solar deal. I've read that legally it HAS to be a totally separate deal than the house. It needs its own closing if the seller is going to pay off the lease and we chip in money. All of this should have been done before the offer was accepted on the house.
It's a separate transaction but if the seller was using their sale proceeds to pay off the lease then it's possible that it can all happen concurrently.
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Originally Posted by TheLonelyGoatherd
I'm the one who had to research and speak to the debt collector. If we chose to assume the lease, they don't "transfer" anything to you. The new buyer has to apply for this lease and be approved just like the original buyer did. Basically you have to do exactly what you AREN'T supposed to do when getting a mortgage. Apply for new debt!
It is essentially a transfer of the lease but they have to pre-qualify you before they'll put it in your name. You're 100% right though. If you don't have a ton of breathing room when it comes to your mortgage approval then this isn't going to help the situation.
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Originally Posted by TheLonelyGoatherd
So the last we heard was the seller said they would pay and close the account but we had to chip in $8000 of that.
Yeah. If I were you, I would stick to my guns and not offer to pay a dime. It's going to cut into what the seller is making on the sale but chances are they'll still come out ahead than if they went back on the market. So, it's somewhat of a win-win situation.
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Originally Posted by TheLonelyGoatherd
I'm educating my agent how that 8k would have to be a gift at the closing table. It cannot be rolled into the sale of the house.
Our final offer was to offer them back the 5k credit they were giving us after inspection. Outside of updating the house, there is a broken a/c, hot water tank way past due and a lot of windows that need to be replaced. A good 20k of repairs and they were offering us 5k. So the most we'll "chip in" for this lease is giving them back the 5k of repair credits. That's it.
We said they can pay off the lease and take the panels with them if they want. Of course the roof would need to be repaired if need be. But this all falls outside of the house closing. It would have to be a separate contract.
That's why agents tell their sellers to take of this before listing their house. It's all a big headache.
Oh and the best part is this..............The panels on this house generated just under $1900 in electricity "credits" with the electric company in the past 12 months.
The payments of the lease 161 per month x 12 months total $1932.
So it literally cost more money to have the lease than the solar saves in electric. We wouldn't start coming out ahead until the end of the lease which is 12 years from now if we took over the lease.
Or we pay the 8,000 to help the seller close out the lease. Then we'd start coming out ahead in 4 years. ($2,000 a year in solar credits earned but paying 8,000 up front means 4 years of breaking even and earning solar credits at year 5 )
Again, I'm having to educate my agent on this so she can point this out to the other agent on why neither taking over the lease or paying the 8k is an attractive offer for us. I may as well take 8k and fling it out the window.
If they don't eat this lease after this weekend, we are walking. At this point I don't love the house anymore.
Thank you all for reading this. I really hope it can help someone out there looking to buy or sell with a solar lease
Unfortunate that you're educating your agent and not the other way around as it should be. Sounds like maybe you have the wrong agent.
Again, I wouldn't offer them a dime. I'm sure given enough time they'll realize they're still making out and should agree.
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Originally Posted by TheLonelyGoatherd
We first heard about the solar at the showing. But they glossed over it quickly. And of course I planned on asking about it. But at that time we are looking a house that needs a lot of updating, trying to take in if it's worth buying or not. The house is built in a canyon and the yard definitely needs some retention walls. So there are a million things to take in. Because I didn't know jack about solar leases, I put it on my mental list of things I will ask about.
The seller's agent glossed over the solar quickly. He said the panels are leased and we'd have to do create an account with them. But he mentioned the electric company several times so I honestly figured it was something with the electric company. He never once mentioned this was a 20 year lease with a company that was out of business and I'd be dealing with the collection agency. Never mentioned the huge balance still on the loan. Never mentioned that I'd have to apply and hope I'm accepted by the debt collector in order to assume the lease. So IMO, these are all lies by omission. If the truth isn't so bad, then why not tell the truth. Why not tell a little bit of the truth? He knew what he was doing by mentioning the lease quickly and moving on
The timeline goes like this- 8/16 showing and offer made - 8/17 offer accepted - 8/24 inspection- 8/25 we signed the disclosure.
We received the disclose a couple days before signing it. So I believe it was 8/23 we received it. But it was indeed AFTER our offer was accepted.
And even in the disclosure it only says solar lease. Again nothing about the company, the balance, applying for debt, etc. All of this came when I tried calling the company to do what I thought was setting up an account. Then I had to ask a million questions. So we only got this info after demanding answers. The contract, the balance, etc
So if by "entering a contract" you mean, when they accepted our offer? Then no we didn't receive the disclosure before that. Should we have? We bought our last house as is as a pre-forclosure. Before that was 20 years ago and I can't remember at what stage we got the disclosure form.
My issue isn't when we got the disclosure. It's how this was all handled. You can tell the seller's agent is trying to be slick. He could have lost several buyers over the summer. So now he's got to get creative. And these sellers are in total denial that they got hosed on their lease.
It's very weird to expect someone to just take over your bad debt in the middle of escrow, 2 weeks away from closing. They knew we had to hash out this debt separate from the house sale. That is the legal way to do it. It says so explicitly in the contract the seller signed. So to ask us now about taking this on? Not a smart move on their part. Because I feel like they were trying to dupe us.
Look at it this way, the solar company put a notice filing on the house. In CA they called it a PUC. Not a lien but a "head's up". The solar debt collector said it will take 14 business days to remove this notice filing before they can sell the house. So the seller doomed his own closing date by introducing this stuff at this stage. We will have to bump the closing date even if we get this resolved tomorrow. We can't close until that notice filing is lifted. So their timing is the big problem here. I can't figure out why they'd want to handle it that way other than thinking we're too far to turn back. Wrong.
I'm not sure how disclosure works in your state but check with your agent. Doesn't seem to make sense for disclosure to happen AFTER you make an offer.
Definitely your agent should have protected you from this situation and did not. As an agent, all you have to hear are the words "solar lease" to know that this is not going to be good and you have some investigating to do.
I also 100% agree that the listing agent could have helped everyone out by making a more detailed disclosure. Unfortunately, I find some agents think the best course of action when something is negative is to try and hide it. The house you're listing has dated bathrooms? Well, let's just not take pictures of them. Funky floor plan in your house? Let's not include a floor plan in the listing or indicate anywhere in the listing where the rooms in the house are. Possible leak coming through the ceiling? Let's slap some paint on that. Too many agents do an awesome impression of an ostrich.
MikePRU I agree that disclosure would be nice prior to making an offer. Inspection would be even nicer. However when we started house hunting, we'd call to set up a showing and the first day on the market there were several offers. Over the summer it was the cash buyers outbidding each other. So it seemed like if you saw a house and asked for the disclosure prior to making an offer, you weren't even in the running. Because there are people making offers the day of the showing. In fact, when we went to look at one house earlier this year, you had 15 minutes to see the place and then had to get out. This was due to Covid restrictions we were told. So you had 15 mins to decide if you liked the place. Everything is so rushed and so much pressure.
And I realize now that going to see this house that has been sitting since May, we took that mentality with us. And we shouldn't have. We should have asked for the disclosure first. But as a buyer, you know that the disclosure and inspection can easily get you out of a deal. So I've often thought it's best for the buyer to give the disclosure prior to accepting an offer. That's what we did when we sold our house.
Our realtor did not even mention that to us so we honestly didn't think of it. But the disclosure is so nebulous anyway regarding the solar that it wouldn't have helped us. The only thing that would have helped us here is 1) our agent warning us to look further into what this lease is or 2) if we had prior knowledge of these bad lease deals.
From the seller's perspective I would have wanted the whole thing either paid ahead of time or disclosed up front.
But that is a good point about getting disclosure up front. If this falls through we will definitely be doing that next time. Thank you.
Maddie and Roselvr thank you for the advice!
Roselvr the solar took your bills down that low? This house has less than 6 kw panels and from what I read, they only produce under $2,000 a year in credits. The seller's July credit was $169. They never showed us the winter months. So in this case, the cost of the lease was more per year than the solar is bringing in.
We are very open to solar but for sure we'd purchase them. And from what we've read, they definitely don't cover you if power goes out unfortunately. We'd need a separate generator for that.
MikePRU I agree that disclosure would be nice prior to making an offer. Inspection would be even nicer. However when we started house hunting, we'd call to set up a showing and the first day on the market there were several offers. Over the summer it was the cash buyers outbidding each other. So it seemed like if you saw a house and asked for the disclosure prior to making an offer, you weren't even in the running. Because there are people making offers the day of the showing. In fact, when we went to look at one house earlier this year, you had 15 minutes to see the place and then had to get out. This was due to Covid restrictions we were told. So you had 15 mins to decide if you liked the place. Everything is so rushed and so much pressure.
And I realize now that going to see this house that has been sitting since May, we took that mentality with us. And we shouldn't have. We should have asked for the disclosure first. But as a buyer, you know that the disclosure and inspection can easily get you out of a deal. So I've often thought it's best for the buyer to give the disclosure prior to accepting an offer. That's what we did when we sold our house.
Our realtor did not even mention that to us so we honestly didn't think of it. But the disclosure is so nebulous anyway regarding the solar that it wouldn't have helped us. The only thing that would have helped us here is 1) our agent warning us to look further into what this lease is or 2) if we had prior knowledge of these bad lease deals.
From the seller's perspective I would have wanted the whole thing either paid ahead of time or disclosed up front.
But that is a good point about getting disclosure up front. If this falls through we will definitely be doing that next time. Thank you.
Maddie and Roselvr thank you for the advice!
Roselvr the solar took your bills down that low? This house has less than 6 kw panels and from what I read, they only produce under $2,000 a year in credits. The seller's July credit was $169. They never showed us the winter months. So in this case, the cost of the lease was more per year than the solar is bringing in.
We are very open to solar but for sure we'd purchase them. And from what we've read, they definitely don't cover you if power goes out unfortunately. We'd need a separate generator for that.
Yes, the solar has saved us a ton of money. Our bills were outrageous before we got it. I hated having to sweat my butt off all day because the electric was so high. Now I mostly keep it at 74 but do turn it down when I'm working around the house.
I wish I knew specifics about our system. My hub took care of it. He had been researching it for years before he made the jump. All I know is that when it snows, everyone else has snow on their panels, we don't.
I'm surprised you haven't killed the deal yet. I would have.
Agree, I would never over pay on a home for $100k more. It's insane! OP's agent shouldn't have let them offer that much, they most likely did not stop them because it increases the house price which equals more commission for them. That's probably why OP's agent was more than happy to submit their offer of $100k over asking, so the agent gets more commission.
Here's the thing about multiple offers - as an agent I shouldn't tell someone how much to offer. It's the buyers house and it's how much the buyer wants it, not how much I think it's worth. I'll never live there and I certainly won't be the reason someone didn't get their dream home. Also, the shouldn't have "let" the buyer offer that much? I don't know any agents that get to pick and choose what the buyer should offer, much less control them to the ponit I have to "let" them decide how much to offer.
On multiple offers, there's not offer/counter-offer scenario. You get one chance and the seller usually accepts an offer. If I tell someone they should only offer 25k over when they're willing to go 100k over, and that house sold for 35k over, who's the buyer mad at? Me, because I told them 25k over. Who cost them their dream home when they were willing to pay more? Me, because I told them 25k over.
Multiple offers, it's up to the buyer to determine what's it worth to them. And I always assume the agent is being honest about multiple offers now. I've lost enough over the years to believe it when I hear it, even in the buyers market. What I would have done is suggest an escelator clause though. Also, IMO, the list agent and the seller effed up. If they wanted to negotiate who's paying the lease it should have been done up front with the contract negotiations.
Last point, we aren't privy to the conversations between them. Let's not assume anything and stick to what we know.
Here's the thing about multiple offers - as an agent I shouldn't tell someone how much to offer. It's the buyers house and it's how much the buyer wants it, not how much I think it's worth. I'll never live there and I certainly won't be the reason someone didn't get their dream home. Also, the shouldn't have "let" the buyer offer that much? I don't know any agents that get to pick and choose what the buyer should offer, much less control them to the ponit I have to "let" them decide how much to offer.
On multiple offers, there's not offer/counter-offer scenario. You get one chance and the seller usually accepts an offer. If I tell someone they should only offer 25k over when they're willing to go 100k over, and that house sold for 35k over, who's the buyer mad at? Me, because I told them 25k over. Who cost them their dream home when they were willing to pay more? Me, because I told them 25k over.
Multiple offers, it's up to the buyer to determine what's it worth to them. And I always assume the agent is being honest about multiple offers now. I've lost enough over the years to believe it when I hear it, even in the buyers market. What I would have done is suggest an escelator clause though. Also, IMO, the list agent and the seller effed up. If they wanted to negotiate who's paying the lease it should have been done up front with the contract negotiations.
Last point, we aren't privy to the conversations between them. Let's not assume anything and stick to what we know.
Thanks for the input. The OP hasn't backed out yet so she must not regret it that much.
I personally would be walking or trying to. I would not have offered that much more either. The housing market will stop being a sellers market if it hasn't already. Let's face it, the house wasn't sold in under 90 days. I would have thought they were bluffing about the other offer.
I'd be renting something before overpaying that much.
Thanks for the input. The OP hasn't backed out yet so she must not regret it that much.
I personally would be walking or trying to. I would not have offered that much more either. The housing market will stop being a sellers market if it hasn't already. Let's face it, the house wasn't sold in under 90 days. I would have thought they were bluffing about the other offer.
I'd be renting something before overpaying that much.
It's highly likely they received other offers and drove them off with the solar panel issues, just like they are trying to do with this one.
Thanks for the input. The OP hasn't backed out yet so she must not regret it that much.
I personally would be walking or trying to. I would not have offered that much more either. The housing market will stop being a sellers market if it hasn't already. Let's face it, the house wasn't sold in under 90 days. I would have thought they were bluffing about the other offer.
I'd be renting something before overpaying that much.
In our area rentals have risen even more than for sale prices have. And for SFH rentals they are requiring higher security deposits and won't budge on their lease requirements.
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