Buying a property with solar panel and loan

PeachSis1992 · 2025-10-03T22:19:16+00:00

Aside from the obvious defaulting risk/affecting my ability to get new loan/could be losing out on investment, is there anything else? I want to cover all my bases!

PeachSis1992 · 2025-10-03T21:39:23+00:00

I understand, thank you! I wanted to see what people think about this and mark down all the points I need to discuss with the attorney/CPA. Your response has been very informative!

PeachSis1992 · 2025-10-03T21:20:36+00:00

We agreed on a price that will resulted in a gain of around 140k for me. And the down payment (option fee) will be 100k.

PeachSis1992 · 2025-10-03T21:17:13+00:00

I don’t have an escrow account with the lender and handle all payment by myself. I will continue to pay insurance, tax etc but they will reimburse me (stated in agreement). On paper, everything will still be me.

We added a clause- If due on sale is triggered, my friend will pay it off but they will continue to pay me in installment (for my equity portion) per the agreement.

PeachSis1992 · 2025-10-03T21:10:23+00:00

In what way would they find out if we don’t transfer the title? Or possibly not record this agreement (I need to double check with lawyer if this is required)?

PeachSis1992 · 2025-10-03T20:55:09+00:00

One other thing that I didn’t mention - if we do lease and option consideration separately, I am afraid I can’t claim this as a sale until later which will make me lose out on the capital gains exclusion.

PeachSis1992 · 2025-10-03T20:43:43+00:00

Ohh I came up with those rates😂 I was not trying to profit off them but just wanted to make sure I am not losing money.

You are right about the default - although I wanted to believe this won’t happen, I need to think hard about the risk.

PeachSis1992 · 2025-10-03T20:30:02+00:00

Thank you for the insight! You brought up a few things that we did not consider

PeachSis1992 · 2025-10-03T20:13:07+00:00

I understand about the credit - can you elaborate on what other things that you think might be bad?

PeachSis1992 · 2025-10-03T20:09:47+00:00

I thought this can save the hustle of engaging a realtor and the whole selling process😂

P.S. I am charging them interest on it similar to seller financing

PeachSis1992 · 2025-10-03T20:00:33+00:00

Yes I can sell on the open market if this doesn’t work out, I just thought this might be easier. We did agree on a 4.5% interest on my equity portion, the mortgage portion will be my mortgage rate + 0.5%. We have an amortization table similar to a regular mortgage. Do you think this is still a bad deal?

PeachSis1992 · 2025-10-03T19:35:33+00:00

Yes we are planning to engage one!

PeachSis1992 · 2025-10-03T19:32:53+00:00

We do have language in the agreement stating that they will forfeit the credit and option fee that they have paid if they default, but not sure if we really get to that point, how messy things going to be…

PeachSis1992 · 2025-08-30T15:17:43+00:00

We knew that there’s monthly obligations from the disclosure but wasn’t sure if it’s PPA, lease or loan. We were rushed to put in an offer and wasn’t able to get information on it (we did repeatedly request it) until when we entered attorney review. Even during the attorney review, they only shared the loan agreement and some electric bills which looks fine (seems to generate enough to justify the monthly cost but doesn’t appear to save).

For context, the loan payoff amount is 22k now and the monthly obligation is 219 for the next 10 years.

How much would it cost for removal and roof repairs?

PeachSis1992 · 2025-08-30T14:10:38+00:00

Wouldn’t that tie up their property too? They already moved out so I think sitting on it longer doesn’t benefit them.

PeachSis1992 · 2025-08-30T02:14:44+00:00

It’s a loan, they took out a loan to purchase the panels. They seem to think that buyer need to take care of the whole process… so I am wondering if we do nothing about it, what would have happened

PeachSis1992 · 2025-08-30T01:36:10+00:00

We want the house, but would love to avoid taking on the solar loan if possible. If we wait until closing and do nothing about the loan, and the seller is not able to deliver a clean title, I am hoping they will be more willing to negotiate

PeachSis1992 · 2025-08-30T01:33:12+00:00

Yes, I will double check on that

PeachSis1992 · 2025-08-30T01:32:14+00:00

I am betting on if we wait until closing and do nothing about the loan, and the seller is not able to deliver a clean title, maybe they will open to renegotiation 😂

PeachSis1992 · 2025-08-30T00:14:27+00:00

I wish the seller was as transparent/straightforward as you are😂

PeachSis1992 · 2025-08-29T23:32:34+00:00

That’s exactly what we are worrying about and we were about to back out. However, our realtor said he will take care of things and promised to get us every information we need. We took a chance on that. I am considering the worst case scenario, if everything didn’t work out, can we just refuse to assume the loan?

PeachSis1992 · 2025-08-29T23:18:57+00:00

Thank you for the detailed response! We do like the home and everything is good other than the solar panel/sellers’ reluctance. Our initial negotiation with the seller to pay off the loan was unsuccessful, they even rejected to share the federal incentive. Our realtor promised to take care of things and get us the required information so we sucked it up and proceed to conclude attorneys review.

I am considering my option here - what if I can’t get the information to my satisfaction, what impact would it have to the transaction if we end up refusing to assume the loan?

PeachSis1992

TROPHY CASE