How solar can boost your customer's home value
Everyone has heard it when trying to sell solar: is it worth it? As part of our training as salespeople we have probably heard a bunch of typical responses: it’s good for the environment, it’s clean power, etc. These are all valuable points and the reason a lot of us (myself included) joined the solar movement. What your client is really asking though is will this add value to their home. Only a portion of them are bright-eyed idealists. The rest are more practical and want to take care of their biggest investment (their home) and another large investment (their solar array).
The answer is not as simple as one would think. In most cases, yes. Value will be added to your clients’ home. But how can it not? Your client is investing money in that home if they sell it. What will happen if the solar array you just sold doesn’t actually add any value to your clients’ home?
Depending on what kind of culture your company has, this may matter more or less. Maybe your model emphasises getting to the close. Involvement with the client is done and it’s someone else’s responsibility to make the job happen. It didn’t matter that the house is a yurt surrounded by redwoods. When a company is young, it’s easy to get itchy. It feels like there aren’t enough projects in the backlog to support the company. When it feels like the company or your sales quota is on the edge of oblivion, it’s tempting to cut a corner here and there. Maybe leave some part of the contract explanation out of the pitch. The “sell fast” mentality may get more sales at first but may also come with headaches down the road (such as when the homeowner tries to sell the home). Then the homeowner gets pissed and gives you poor ratings online. You may grow quickly like some of the big solar companies but look where their ratings are. Tesla Energy’s ratings (2.5 stars on Yelp) don’t reflect the quality of their amazing product.
The opposite kind of culture is one based on patience. This is the ideology that my mentors taught. They know that they’re selling themselves, not the product. They aren’t pushy. They show their clients that they care and actively help them avoid problems with their installations. Having renowned quality will help your entire sales team get referrals. Growth might be a little slower but sales becomes a driver of business today and trust later down the line.
How does focusing on quality add any value to my clients’ home?
That’s exactly the question we want to ask ourselves. There are aspects to some loan contracts that will legally prevent your client’s solar panels from augmenting the value of their home. Having your sales team know the contracts and their full consequences can help protect your client’s investment (play this point up in your proposal). Know that some contract clauses can cause problems refinancing, appraising, and selling. Know what they are and how your client can mitigate them.
Even the type of transaction can affect things. Appraisers can only raise the valuation of the home if the array was purchased. Leased or PPA agreements are not owned and cannot be added to the value of your home on FHA or Fannie Mae homes. Even in the case of ownership as mentioned above, there are certain stipulations that can legally define the solar project as personal property whose value won’t transfer with the sale of the home. There are even complications with PACE financing if the sum of the loan and the amount owed on the house are more than the value of the home. Check out this article for more insight.
If you have guided your clients through the right kind of value-boosting financing, the solar switch will amplify the value of their property (especially in these 10 states). Recent research by Zillow has shown that homes with solar sell for 4.1% more than comparable homes without solar. That’s a handsome $9,274 premium for the median-valued home. On top of that, multiple real estate surveys show that solar-equipped homes not only sell for more, but also sell faster!
Help your salespeople understand what contracts they are selling. You can purchase training materials at the Appraisal Institute (link to their bookshop) or have a GREEN designee come and educate your team. Be wary of quick deals that banks are pushing. Remember how long a solar contract is. A deal you did 10 years ago could come back to haunt you. Lastly, talk to your bank about the language and which loans will help your clients the best.
Help your clients navigate through the pitfalls and caveats as they embark on their solar journey. You’ll win their hearts and their business. Until next time!