Green Financing Hampering Home Sales

DAILY REAL ESTATE NEWS | TUESDAY, OCTOBER 20, 2015

Complaints are growing from home owners and those in the real estate industry in California about a government-sponsored program that helps to fund energy-saving home improvements that critics argue is making homes more difficult to sell.

More than 50,000 California home owners have enrolled in Property Assessed Clean Energy – also known as PACE – financing since 2008. The program allows residents to borrow money for green retrofits, like adding solar panels or energy-efficient windows. The financing is paid off through special assessments on property tax bills. The assessments, however, are intended to remain with the home in the event of a sale.

Read more: ‘Green’ Is Important for Buyers

As such, some home owners who are trying to sell have seen potential buyers reluctant because of the higher tax assessments.

Many real estate professionals in California are organizing against PACE and say that it is causing a growing number of would-be sellers to be stuck in their homes.

Rich Simonin, owner of Westcoe REALTORS® based in Riverside County, says PACE assessments are posing challenges in about 5 to 10 percent of the brokerage’s deals. The brokerage sells about 700 homes a year.

Nearly 30 states have passed laws to allow residential PACE program, but so far several states have been holding off due to the controversy surrounding it in California.

Supporters of the program, however, say it’s working that Renovate America, which has financed 90 percent of the residential PACE deals in California, says its 47,000 projects have created more than 8,000 jobs and reduced carbon dioxide emissions by an amount equal to removing 330,000 sport utility cars off the road a year.

Source: “Green Financing Has Hobbled Home Sales in California,” Reuters (Oct. 19, 2015)

 

I ran across this just a few weeks ago in San Luis Obispo California: Green Financing Hampering Home Sales can happen.  If you are a seller with a solar panel system you need to be aware the buyer may not have the funds or the ability to qualify for both the house and the solar panel system along with whatever obligations the currently have.  If you are looking to sell check with your solar panel provider for the payoff information and be ready to have to negotiate that as part of the sale of the property so it doesn’t hamper the sale of your home.

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