Appraising Solar Panels
By Mark Buhler
Excerpts: You drive up to the property. There they are, on the roof: those shiny black rectangles that are just about to turn a simple assignment into a headache. What to do? Put the car in reverse and slowly back away? Call the client and have them re-assign the order?
Those are certainly options. But in today’s tight market, with orders as scarce as hens’ teeth, let’s explore some other approaches to solving this problem.
First: How do appraisers value any amenity of a property?
Appraisal 101 would suggest the matched pairs analysis. So our first task is to find a property with solar panels that’s similar to the subject.
That search quickly comes to a screeching halt. (I can almost smell the brake dust.) There are no comps with solar panels in the area. So when we type the report, a comment like this might slip past the reviewer and underwriter: “A thorough search of the subject’s marketing area revealed a scarcity of sales comparables with solar panels.”
So far, so good. Now let’s continue with that reasoning: “Due to a lack of comparables with solar panels, no contributory value can be extracted.”
This supports a zero (0) adjustment, right?
Well … maybe. A savvy underwriter or reviewer might wonder why the appraiser didn’t consider the cost and income approaches…
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My comments: Good, practical advice. The article is worth reading. Solar for homes is everywhere now. I recently spoke with Mark. I asked some technical questions about financing solar and electric companies lowering what they pay to homeowners with solar. He knew everything! Taking a webinar or class from him is definitely worth the price. He has been teaching the classes for a long time.
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