What dirty secrets should I know when buying solar? Going Solar in 2023 What You Need to Know!
Webinars are great but what if you had one specific question? Don't sit through the whole thing- run right to the questions you have. Is solar worth it? What questions should I ask when buying solar? Is it harder to sell a house with solar? What issues could there be with my loan when I buy solar? Should I buy solar? Who should I trust when buying solar? Have there been issues when selling homes with solar?
what dirty secrets should I know when buying solar?
All right. Thanks for joining us today on Going Solar in 2023. What you need to know, I have a team of experts here who are going to discuss everything to consider from rising energy costs to solar benefits to costly mistakes to avoid as a homeowner to financing in today's Rising with today's rising interest rates.
So first up, we're gonna have Jeff Delgado. He is the president and founder of, I leverage an agent in insurance agency that also has a solar division. Hi, Jeff. Hey. Hey, Carla. How are you doing? Thank you for having me today. Excited to be here. Thanks for joining us. I'm excited to get your take on some of the benefits of going solar, sure. I first thank all of you guys for jumping on and listening in. It's, an interesting time in the world and I, believe most of the questions regarding solar. . For me it was overwhelming. There was so much going on with solar. People were asking a lot of questions. Over the last few years, a lot of my clients, I own a business and a lot of my clients were asking questions about, should I get solar?
Which direction should I go? Why should I do it? So what I'm gonna cover, if you're okay with it Carlos, is some of the basics on why someone would consider solar what I was told and how it's been making an impact with our clients. So our clients, we try to educate them on understanding different ways of going solar, how they could own it and control their energy bills and things like that.
It's okay to just share my slides. I'm okay with that. No. Okay, great. Make sure I got this going right and then. Let me know if you could see my slides possibly correctly. You see it correctly there, Carla. Yep. All right, great. Thank you, guys. I'm gonna try to go through this quickly. I know we have a bunch of people on the panel, so I'm gonna be very cautious of time.
We just, we own, I leverage is a company that has many different divisions. So we start out just an insurance agency. We became an investment advisory firm and then we added solar by the demand of our clients asking so many questions regarding why they should get solar. So we added a division a couple years ago, which was really a service industry to be.
and then it turned into an amazing division that people started coming to us for all kinds of questions on it. And then we made a big impact. Cuz we believe that timing is everything. And if you're listening to this today, and if you don't have solar or you're considering it, it's a very interesting time because of a lot of the rules.
And I know they're gonna, they're gonna get into that in this call today. But all these different regulations have come out and changed the way solar will be offered and how that affects you and how it affects the. Your energy bill is very amazing, so you're gonna wanna really wanna listen in to what we're gonna talk about today.
This was just a quote by Warren Buffet interview in Fors Magazine, where he says that energy deregulation will be the largest transfer of wealth in history. So that was the reason why our division of the I, I leveraged solar Division got excited about this because it's another wealth transfer. It's another movement of what's happening and what's to come.
As you probably know, people are all gonna be eventually driving electric cars. People are eventually all gonna be in homes that have solar as. . So why not get in front of it and be there when it's. Versus getting there when it may be a little bit later and have different types of benefits.
What we do differently is we are not subject to any one company's product or service. We are independent, but we offer many of the largest names, if not the biggest names in the solar industry. So if you are interested in solar, you'd wanna talk to someone who at least has the right companies and not just one, because some differences may make a big impact on your bill and your.
And objective. So we heard of probably SunPower, and you probably heard of Sunrun, the largest sun solar company in the country. And SunPower is known as the Apple computers, if you will, of solar. And then we also have many other carriers that you may have heard of before, E S, P, and Cubics.
The bottom line is we are not subject to any one company, product, or service. The whole point of solar is this little picture, believe it, or. is the distribution and transmission of energy. I, look at solar, like a hotdog if you ever read a hotdog, it's really good, but you don't know how it got there.
You know how they made it. Very similar to energy, right? Like it's, you don't know how you got energy into your home, but the further out they had to get the energy in terms of the transmission and the generation and the genre generators and the distribution of energy, all that. If you look at your bill carefully, you're paying for that.
So from the generators to transmitted it to your home, that's gonna cost. But when you have solar, all you're really doing is getting the power directly from the sun going into your roof to an inverter, and then boom, you own your own power. So it's, to me, a very simple conversation and there's a lot of little details and we're gonna have other people talk more about that in the couple speakers coming up.
But the whole idea is to control a bill that most of mine. I didn't control, for example, you can't control the water bill. You can't control certain bills that are going into your homes and make them a fixed expense. And specifically, as you get older in life, and unfortunately, I'm, getting older like anyone else, you want to fix your expenses as you get to certain times of your life.
So if you want predictable expenses in the future where if you could make energy and not worry about what interest rates of the energy bills are gonna cost, you could do that in solar by control. And so last slide, last couple of slides. These are some of the reasons why people are going solar. I'm not gonna go through it.
I'll go through it real quick. It lowers your electric, your electrical bill. You'll bring your bill much lower. There's a new mandate in Senate bill 100 that all new homes in California must have solar. And so all new homes will eventually all have solar and all new homes have solar. You'll also get a 30% tax incentive.
It also helps bring the value of your home according to Zillow. It also is clean energy, so it's great for the environment. It's just cleaner and better for the environment. And you could also get a battery that could also store energy and make your home extremely efficient by powering it on days when maybe it's potentially.
A blackout or some sort of a tragedy happens in the country where you never know if your energy goes out, and so it gives you the peace of mind though, that you'll have your lights on no matter what happens. So you control that as well, utilizing. a battery. So the reason why people are going solar, there are so many reasons.
But there's also the reason for new rules like the NEM 3.0 where you're not able to get the power and credit back into the grid, which is a big deal as of right now. And I know Zach, you'll probably cover that, but the last slide, and I'm I'll close out is going solar, whether you wanna look at it that way or not, it's financial.
You have to look at things like how long you have to make the payment. Do you wanna purchase the panels or do you wanna lease the panels, or would you like to get what is called a PPA? That's another option available for solar. You could also free up the money that you are paying in pg e and put that in places that could work for you and give you better advantages for things that you may really wanna focus on in retirement or maybe a goal you want to save or something else like that.
Also, solar is a very low risk, the high reward. It's something that you could control. As like I mentioned earlier, solar could also help tremendously in retirement. And what, I mean by that is what people are more concerned about is being able to be clear and predict what their bills will look like at certain times of their life.
And so having a solar bill be fixed for the remaining of your whole life is a big factor in eventually eliminating your energy all altogether would be amazing. So I know we're gonna go into much more than what I talked about. Now. I just want to give a brief 10 minute intro of why we, I believe the timing is right to go solar.
I know Zach, you're probably gonna come in and go into that, but I just hope that's enough information. I get you guys excited about it, ask questions about it, and then we can go from there. So let me go and stop sharing my. Gotcha. Jeff, thank you. Overview. Yeah, that was really informative. I think we're gonna go into, so we do have Zach solar expert and he's gonna chime in a little bit more about some of the costs, some of the benefits that Jeff just went over.
Absolutely. Thank you Carla. And thank you, Jeff. That was a that was an amazing introduction. So yeah, just like Jeff was talking about, . So the breakdown of solar and why it makes sense to go right now. And I don't know if you guys have heard about any M 3.0 as Jeff has mentioned, but that's gonna be coming it's gonna be live April 13th.
And so what I did, I'm gonna actually show you guys a realistic ex example today that I actually proposed to one of my clients. So today, let's say their bill is typically, their utility bill is anywhere from 200 to 300, and that's the case for this. so what I did for him, I was like say ballpark two 50.
We just went with, so I started drawing this chart for him and we went into five year increments all the way to 30 in 25. And I went to, we went to a range of what his actual utility bill is. So we're gonna mark this. Two 50 now. Today I was able to propose for his full installment and everything, a $163 payment.
That is going to be fixed. Now, I'll explain that here in a second, but I know this is a little Missy. I'm sorry for my handwriting, but what I want you guys to understand is the visual aspect of this. Now there's an increase of about 8% annually for, utility companies. So keep in mind 8% usage or 8% annual percent on your.
Now with your 250, what you think that's gonna do over about a 30 year period of time, it's gonna have a slight increase, but it's gonna compound. So that's where that 8% comes into play. Over the years, now, what solar does is it puts you on a fixed rate over a 25 year period and then drops off. So what this does is it locks you in and it allows you to prevent, obviously, the escalation.
You know your bill from the utility company. Cuz now that you own your power, now you're able to have the opportunity to save everything in between. And there's only so much you could do with all the savings. Like how Jeff was saying as far as like retirement goes, having a fixed rate Everybody wants something that they can control, not something that's out of control where they this is only 8%.
Keep in mind pg and e went up 20% alone just this last year. So if you can this is just a relatively conservative number here, but that's literally what I went over with my client. And solar obviously just makes sense right now and especially with what what Jeff was. It's, there's just no better time, especially with the N Em 2.0.
We're able to grandfather people in for 20 years. So, can you go over that a little bit for people who have no idea what N Eem 2.0 2.3? Yeah. Yeah, absolutely. So say for N Eem 2.0, I can actually use this example still. So N E Em 2.0 we can lock you in, say for this client, this is, this wouldn't be your guys' number, but I'm able to lock in my client at 1 63 until the 25 year mark.
And that's for purchase panels or lease panels? This will be for purchase, no. Okay, so this is for purchase, sorry. Yeah. So for purchase it'd be the 25 year fixed rate. Now if the client was to wait until April 13th where he was now, he or she is now obligated to go to an EM 3.0 route, you're looking at a estimate of at least $60 a month increase on this.
alone. So instead of 1 63, you'd be looking at 2 23 at a minimum just for this person. Now I know this is this is just an example, so if you guys are in this ballpark or you guys can figure in plus we can sit down with you guys and explain this a little bit further for your own personal case.
But this is just a good example to show how much you're able to save within these two parameters. Okay, so just to clarify, N Eem is a program specific to California and one of the key changes happening in 2023 is that we're going from N E EM 2.0 to N E M 3.0 in April of this year. And that sounds to me like a cost increase.
Can you explain where that, why that increase is happen? Yeah, absolutely. So the, increase in the cost is ob obviously one, you have to get a battery because for your nighttime usage, right? So April 13th, once it, once you're at the April 13th and you don't have solar and you try to go solar one thing's gonna happen.
Whenever you go solar, you're gonna have a payment for your solar. For your panels. And then you'll also have your nighttime usage payment. And that's gonna also be at an increase at an increased cost. It's not gonna be at today's rate where they have once, an EM 3.0 comes out, everything's gonna be increased.
Plus you're not gonna be able to achieve or how Jeff said, you're not gonna be able to. collect those credits for the, overproduction that you have, that you generate and you put back into the grid, that's not gonna happen. So there's a lot of there's actually a lot of savings that are at stake before April 13th.
Okay. Okay. So before with NM 2.0, people who own solar owned their usage and could use their extra credits for nighttime. Absolutely. Yeah, So the overproduction would would cover your nighttime, and then anything that's actually overproduction, like I said it gets pushed back to the grid and you're actually able to get a credit as into 3.0.
You're not looking like you're able to do that. I see. . Okay. So no more being able to use your over production and solar energy. So offset that in nm 3.0. Coming April, you have to buy a battery in order for you to be able to chart, use, enter, sorry, in order to energy during the night. Yeah.
So basically you'd have to have the battery to offset the nighttime usage like you're honestly, April 13th, battery, you don't get a battery with your solar panel. That's not going to make sense because you're still, you'll end up having two bills. Now the nighttime usage is gonna be smaller than your utility bill, but again, you gotta remember your, you're tacking on that solar panel got it.
Okay. . Okay. So thanks for going over that. I'm sure we'll talk more, a little bit more about that one once we get to the financing part. All right, thanks Doc. So we'll see you in a little bit. I'm gonna bring on Vito. He is the lead team, lead of the A Group Compass. Hey Carla. Hi. Hey, Vito. Thanks for joining us today.
Yeah, thank you. So I really wanted to have your perspective on the solar situation because as our last deal that we did had a huge solar issue which is one of the reasons why I even wanted to put this together. Because I thought that solar situation could have easily cost us that deal.
So just to go over briefly what that situation was. My, I was re we were representing the buyers and we were an escrow on a home that had leased solar panels. Now the sellers weren't aware that the company that they leased those panels with went. Shortly after they purchased those panels or leased those panels.
To top that off, there was a huge question as to whether or not those panels were even producing any energy because they haven't been serviced in a long while. There's nobody to help verify that since the company was bankrupt. And then to add to all of that the roof was nearing its last leg.
So the roof, it was on a very, old roof that had to be replaced. And so that turned out to be extra cost to.
remove the panels, reinstall the panels. That's right. Something, cons to consider too. Let's get your take on that. Do you have any other nightmare stories regarding solar panels or anything you'd like to share? Yeah so here's the thing. It's, the wild, west with sun, solar power.
I have solar on my house. I, have. I have one regret and I wish that I didn't lease it. It was a P C and I believe Jeff mentioned what P C or P A was, but I wish I financed it all the way through instead of. Leasing it or P a or what have you. Simply because there's a value proposition. Now when you go to sell your house and you have a leased item on it.
It could be solar panel, it could be water software, it could be whatever. You can't add, that's actually a liability. It's not an asset to the property, so you cannot add value to it. It's, you have to be very specific and be very careful about. I've had people knock on my door and say, we can just lease it or PPC it or PPA it and say, Hey, it'll add value to it.
You lose complete credibility with me when I hear that because you have no idea what you're talking about. I know Jeff knows what he's talking about. Cause we have that conversation. You understand that when you add something that's a lease, it doesn't. It is just if you lease a car that's not an asset to your estate, to your value, to your.
Your co, your value profile, so just be very, careful about what you're doing. There is nothing wrong with leasing solar. There's nothing wrong with P doing the p a, but you have to know what companies you're working with and when it goes to transfer, you have to know that it's easy to do the.
There's a system set up and it's very well documented so you know what's going on. And in your case, you had a, realtor who was, oh, I don't hate to use the word, the term, ignorant, but she didn't know what the process was. So technically as ignorant not, in a bad sense. She just, she had it in her head that this is the way is, the buyer's problem.
And I, it's not, something I have to deal with. It is everybody's. And if the sooner you figure out, Hey, I'm selling the house. You let the solar company, Hey, I'm selling the house. You let the sellers and buyers know you let the lenders know. You let your bank know. You let everybody know there's solar on the house.
We're selling the house. Just make sure that we're all on the same level of communication so we know what's going on. We've had a same situation where I sold a house down in aromas, down in the country. In Monterey County and they said it, there was a brand new solar system on it. It had never been picked up.
It was a leased it was actually producing power and the company came back and told the, new owner, my client, my buyer, that he owed money for producing this, for having the having to lease this. This, solar panel. There was a legal issue and one thing led to another.
They backed down. He had to get a lawyer and it was like this issue. So there's a lot of things that can happen when, it goes to transfer the property. When you go to sell the property, make sure you have all your. T's crossed and your I dotted. So that would be my only thing outside of the fact that when you do a lease, you don't get value out of the house or more value out of it.
Yeah. Okay. So that leads me to my next question. Does solar add value to a home? Absolutely. It's like a pools, right? So you can say, I have a pool in the backyard, and some people will be like, yeah, that's great. I don't really want a pool, so I'm just gonna bury it . But I just spent a hundred thousand dollars on this pool.
I don't care. I don't want the pool. So there's no in intrinsic value to the buyer, and value is in the eye of the beholder, right? So when you put solar on it and you buy it, you pay it off, or it's financed. There's an actual asset value. When you lease it or p a at p I don't, I'm not sure what that term is.
It's, a lease item. So you it's, an attachment. It's a lease. It's a liability. So it's not a negative value because you do get utility out of it. You get lower price power. And everybody knows if you live in California, have power, unless you're in Santa Clara City. Power is expensive, electricity is expensive, gas is expensive, and that's just it's not just here.
It's in, on all the coast cities or coast states. It's just naturally more expensive. So just be careful what you're doing. Work with, I love the whole idea of what Jeff is doing, where you have an idea of being able to shop four different companies and understand what the costs are and what the outs are in everything.
And I think that's a great, a fantastic, option that I didn't have when I did it. I wanna say, 15 years ago and Guy put the contract in front of me, I'm like, I'm saving money. I don't care. And absolutely there's a value of, I'm stuck at, I can't remember what it was, 14 cents per kilowatt.
And now I don't know what it is, but I know I'm, intrinsically stuck at that 14 cents less the true up. So that's a value to me. It absolutely is. My electricity is a little bit less than all my.
Thank you for that. Okay. And then anything like, so in terms of this old roof, would you say if you have an old roof, should you even get solar on that? Or what's, so what's your take on that? Hard closing salesman will tell you, oh, we'll pay to have the solar panels taken off when you do go to replace it.
I don't know if that's true or not. I don't know every company. But my, company, they told me, I asked the question cuz my, roof was relatively new at that time. and but yeah it's, a cost. You're gonna have to suck up that cost and be aware of it. And that should be something that you as a real estate person salesperson, you should have that conversation with your clients.
As a homeowner, you should know what you're getting into. And I'm sure Jeff does a bang up job knocking that stuff out and saying, Hey, look, when it comes. Time to, replace your roof, it's gonna cost you about six, $7,000. I don't know what that costs, right? Don't get a alarmed, but I, have no idea what that is.
But at the same time, you have to be a very wor Derek. Zach, how much does it cost? ? So I wanted to bring Zach on here. Sorry to surprise you, Zach, but can you explain to us some of the process? I'm sure you encounter this a lot, people who have the. Who that roof needs to be replaced, so they're not necessarily gonna put new solar panels on it because it costs about three to 7,000 to take off and reinstall.
Yeah, no as far as roos go like when we had to have our site survey team to go out, we had to test the integrity of it. We had to look at the integrity of it. We had to look at the condition of everyth. we have to do our part in making sure when we stamp our, when we stamp our name on it and we send it off to pg and e or Edison or whoever, utility company it is, cause we have our inspection card.
We have to make sure everything's in line and congruent. But as far as like the Costco everything's gonna estimate in terms. , whatever the size of the roof is, whatever size sometimes only 20% of the roof needs replacement. Sometimes 80% of the roof needs replacement. Sometimes we only do the, where we actually install the panels.
But the main thing is, as far as roofs go that I is that you can bundle it with the solar where you're still able to get that tax incentive. So if you just do the roof alone, you're not gonna be able to get that 30%. and it's not the 30% isn't guaranteed just as a reminder out there.
But yeah, as far as the, as far as roofing and solar, we try to pair those up as much as possible. So you're saying that if you do need a new roof at the time that you're considering installing solar, that as part of the solar loan and financing, you could actually finance the new roof as well? Yes, ma'am.
Yeah, you can wrap all that up into one. And you get the 30% off of that too. The 30% tax credit. Yes, sir. Potential. Nice. Wow. Alright. That's something that's the difference between a hard salesperson and a good quality salesperson. Zach is gonna take the time to educate you on all that information. Yep.
and not just force you into a pro, into something just so that you can get onto the next house. And that's, what you really wanna look for, is somebody that's gonna take care of you and not just slam you into a deal and never talk to you again. Absolutely. Yeah. I appreciate that, Vito. Actually, if I could share so the client that I had, they had three homes.
They had a cabin, they had a they had their home down in la and then they actually have a home out in Santa Rosa where I'm, where I currently live. And for instance, I could have sold this client at least two of the three. The cabin, they don't really use they don't have enough usage, but as far as the home that's being, or the home that's in Santa Rosa, they're actually what do you guys call it?
The it's a certain term for agreement whenever the, loans, like they just purchased this. so they don't know what the actual usage is because the usage of the solar panel of your solar system is based off the customer of whoever's gonna be living in the home. I told 'em, I said, I don't feel comfortable selling you a system whenever it's not fit to your needs.
It's fit to the needs. That was prior. for the annual. So it's just there's a lot of shaky stuff that goes in these within the solar industry. There's a lot of flyby companies that come in and like, how you guys experience and I'm sorry you guys had to go through this a company that went bankrupt and they were no, longer to even help out with the warranties and stuff.
All that stuff is washed away. There's no one that you could call, there's no one that you could reach out to. That's why here at I leverage, like we try to, you. do the best in terms of having someone that's been in the industry for 10 to 20 years or even longer. Someone that's reputable, someone that we know within our counterparts so that we don't run into situations like this.
And I'm I hope, I think it sounded like you guys got that all under control and hopefully over that client's better off, but Yeah. Yeah. The buyers had no choice to assume that lease if they wanted to go forward with the home, so they ended up assuming that lease. So I think actually that bring.
To the next part of this, discussion is so that solar company that they lease those panels with American Solar Direct at the time was one of the fastest growing solar companies. Oh wow. In the US and then five short years later, they went bankrupt. So what is, and I honestly, the co the contract that the sellers signed, when I looked at it wasn't a hundred, they weren't getting a hundred percent of the usage, so it wasn't a hundred percent contract.
They actually agreed to a 70. Contract. And the solar the sellers, they, English wasn't their primary language. Okay. And so my take on that was that they took, got taken advantage of. Absolutely. So how do you vet these, companies? It seems like there's very little regulation in terms of.
The solar industry, it's so fast changing, like how would you go about shopping for solar companies and making sure that they're reputable and that the contract you're signing is actually a legit Yeah. I think where I would actually start, Carla, is one. obviously look at who's coming to your door, cuz typically you're greeted.
You're not, or you go to Costco, you can get Sun Run. But typically a lot of people, a lot of this business is done on the doors. So one obviously who you're buying from. Two, you get the the, quality of the panels, the type of panels that would be going on your roof.
and then you look into their, you do a deep dive into their, at least the, company and everything. I actually provide a lot of that stuff. And just before we even get started on our conversation, or I don't even talk about the sale. I just talk about because these, are the problems that come up all the time, right?
These are the problems that a lot of people face in this whole industry. I can't tell you how many times I've knocked or a door knocked in. Sacramento, even homes near Santa Rosa where I live, where they've had, and even Sunrun, even Sunrun, they've had a couple mistakes, but they've had their solar system on their home for six months.
They didn't have the, pto, which is the permission to operate where you turn on your system and then you actually get charged for your solar energy and you no longer have your pg e bill. In terms of the Santa Rosa homes people, have their sim like their system on for six months. And all the, a lot of times, like all this is a lot of door knockers come in and they just try to get the, install done.
So they get paid out and then after, the install's done, you don't hear, you don't hear back from them or the company. That's a lot of the, that's a lot of the horror stories that, that go on within this company, or not this company, but the. . So a thorough vetting obviously needs to be done.
And is that just looking at Better Business Bureau for reviews or complaints or like what exactly? If people don't have access to you, Zach, like how can they go about protecting themselves? It's, honestly tough cuz like I said, like I as I mentioned Sunrun with that company, they had a couple heirs.
I'm not saying that everyone's perfect or heirs don't happen, but I would almost go through who you, who that way you have more of a tie of more of a tie with that person or the person that you're being sold from? I wouldn't recommend just buying from anyone.
As far as like the, smaller companies, I would definitely do more research for. So who are some of the big name, reputable, big names. Like a lot of our partners, like we have Sun Power, which is massive. Sunrun, they're massive cubics. They're very good. They've been in it. 15 years, a little over, like more than 15 years.
E s P has been in the soy industry for I believe, 15 plus years as well okay. There's, like a lot of vetting that goes on through there. As far as like the client. Like I said, I would just do the research on the company. I would go through, look at all the reviews, look at the Google reviews.
That's, really gonna show you like, Hey, what's up? What's going on with this company kind of thing. If people are facing a lot of issues and you gotta be careful as well cuz sometimes company delete those, type of negative reviews. So again it's, very hard to, vet. I would honestly just go based off of if, someone in your neighborhood has a solar, system and they, I would ask them how they're.
was I think that's honestly the best bet. And then I would get that person, whoever sold to them. That's honestly that's, really the easiest way to sum it up, because like I said, there's just so many, there's so many things that go on in this industry until it gets regulated. There's a lot.
Yeah. . All right. Yeah, word of mouth referrals. That's always the best way to find that's the tough thing when it's not a regulated industry, right? Just the whole presentation of it. That's, why you hire a real estate agent, a realtor, because we have a process. We have a, code of ethics, and we have brokers that we have to report to.
I'm a broker, but I also report to a, corporate broker in case something goes awry. . We have processes in place that make sure that our clients are protected. And because I've been doing item for 19 years, I was just talking to another client of mine you have these processes in place that take out the name.
So in case a seller happens to be racist or whatever, it has nothing to do with it. All we're seeing is black and white and green, right? I don't care about the, who's buying the house. I wanna make sure. My client gets the best deal, best turns, best everything. And that's what's important. So we take all that out of the way and we just focus on what's important.
When it goes to selling a house, you want to be there all the time. You want to somebody that's gonna be there and not just sign a contract and the next thing you know he's gone and he never talks to you again. You want somebody that can be responsive and talks to you all the time and say, these are the steps that's going on.
What happens if, and that's a big question. What happens? Sun run. Not that they're going anywhere but American, whatever you heard that was in the news for a very long time. What happens when that company folds? What's gonna happen to this contract? Does it just go away? Am I free and clear, or is another company gonna assume it?
What? Yeah. Who? Who do I call? Where's the one 800 number of holy cow? Something just happened, Absolut. . Absolutely. And it's carpet diem, right? People have to understand what they're getting into. You're buying a million dollar house or a $2 million house. You're putting a 30,000, $40,000 unit on top of that roof.
You're, responsible for it. Don't just go with the first guy that you know, says here, this is the best deal that you have. Go with somebody that's reputable, that's been around for a while. Absolutely. And has those contingencies in place to protect you. Absolutely. Let's bring on Scott Hill with Hill Mortgage.
He is our mortgage broker and I'd love to get Scott, your take on the process cuz you are definitely involved in terms of when it comes time to sell the home and the buyer assumes that lease as the mortgage broker you have a say. Yeah, absolutely. And, thanks to the other panelists here, you guys educated me on a lot of things.
As the mortgage professional we, sometimes get hidden from a lot that's going on. It's our job to make sure the client can, get the mortgage and buy the house. And I, myself, like veto said I, have solar and just quick story on, my home, I was fortunate enough that the.
owed probably about 30,000 on his loan, on his mo his solar on his home. And just, the interaction of, us buying the home with him. He was kind enough to pay it off for me. How cool is that? ? Wow. So I moved in and got a $30,000 loan paid off. But on the flip side, and this is just a side.
We're firing up the new hot tub, we're running it. You're having a great time. And I'm like, I get my pg and e bill and I'm like, this don't look like we got solar . Yeah. So I'm like, all right, what's going on here? He pays off the solar and my bill is outrageous. I got three kids running computers and the house and energy and so it turns out the solar wasn't.
For the first day or four months and I was going nuts, right? With the the power thinking it was being, a lot of it was being covered by solar. So that's when I learned about this true up bill and this and that and I, guess my wife handled it, but we had to deal with pg and e and they said, oh, we can't refund it.
And I, maybe some of the other panelists can speak to this, but I had to wait until the next January, cuz I bought in January to get the refund. . For the solar that wasn't working. because I had to pay upfront all the utility bills that I was going nuts on. So that's something maybe one of you guys can, answer for me at some point would've done.
But in terms of as a mortgage broker what we're looking at is, our buyer gonna be able to qualify? And it all starts with communication. And we were all learning, right? Real estate agents were learning, lenders were learning. brokers originators were learning and there was a lot of lack of communication.
People would buy a home, we'd be the last to hear that there's solar on this property. And then we're scrambling to try to figure out is the client gonna qualify and, all of that if they're, especially if it's leased or if there's some kind of a lien and they're making payments, to eventually own the panels or what have you. Nowadays it's gotten really. The biggest nightmare that I've had and by the way that I just wrote. A, little screenshot here of you own outright your lease or your finance. Those are the big three. Okay. That's some awesome graphics.
Scott. You like that? I got that. I love that. Carl, Rob, Carl. Rob uses us all the time on, the news and it seems to work so not quite as, as nice as Zach's handwriting on the big board behind. Those are the big three. And, for me, my I, owned outright right away, so it's pretty easy. But if I get a client that I find out is going to need to qualify because there's payments being passed on to them that's been negotiated in the transaction.
There's two things we gotta think about is a house is dti, the debt income ratio gonna work out for this. , right? Are they gonna, are they gonna be able to afford, do they just squeeze in on the mortgage payment, taxes, and insurance? Is this gonna push them over the limit or is it gonna be affordable?
And then also if there is a lien on the property. . Now I've got loan to value things I've gotta think about, right? That's also a qualifying factor. Loan to value mean, Hey, I've got a $500,000 mortgage. I've got a $30,000 lien for solar panels or what have you. How does that compare to the value of the home?
And that can affect pricing on a mortgage a little bit as well. So those are the main factors. We're looking at from a mortgage standpoint is qualifying and the key is communication. And Vito mentioned it earlier as well, let, you'll let, your mortgage professional know upfront what we're about to get into with this buyer so we properly prepare them from a qualifying standpoint.
One, one horror store that I did run into, and I really don't run into 'em very much. We were doing a refinance for one of my really good clients. I, thought everything was gonna go fine. I locked the loan for 30 days. Your typical loan lock to preserve a great rate. And this was in 2020. And the solar company, it was probably one of these ones that Zach was mentioning more of a fly by night and knock on the door and, get the business.
They were not working with us at all. They were not budging and typically they would not you. We, could not get them to remove the lien subordinate work with us to put the new mortgage on, to replace their existing mortgage and give 'em a lower rate. And it was just badgering back and forth. And this went on for about three weeks.
And I just told the client, don't worry your, loan is gonna, your loan lock is gonna expire, but I'm, gonna take care of it for you. I'm gonna eat it. Don't worry about it. But they caused a lot of problems for us, and I don't even know if they're in business, don't remember their name, but majority of solar companies.
Do their best to work with you and make it pretty easy nowadays that everybody's getting more familiar with purchasing home with solar. That was just the biggest horror story that I had and have not found that since it's been pretty smooth sailing most of the time. But it's, communication and, us qualifying the clients on and, learning about their loan devalue and attacking it on the.
Not, too late. Once we got a couple weeks to go, we don't like surprises as mortgage brokers with solar, we don't like. Yeah. Let everybody know the first couple days you're in contract and then that's all you have to worry about because everybody's gotta do their own due diligence. Yeah. Title, escrow, lending, real estate, everybody has to know what's going on.
And if you're not doing it until the 25th day you're gonna put a lot of people into a tailspin. Yes. . That's absolutely the case. And, if we know upfront, oh it's, usually a, breeze to, to to work with. It's, no different than real estate agents that don't tell you that.
The client's buying a, flip that just took place three weeks ago, and it's We need to know all that stuff. And socialist education, letting your partners know. But everyone's gotten really great about letting us know nowadays, solar. Why? Because it's becoming so much more prevalent in the market.
So something that you said that I didn't realize. So there's a potential that if the buyer's shopping at the top of their price point and they're like this close with their dti that solar could push them over the edge and they could not. Qualify for the home. Is that right? That is correct.
That is correct. And go ahead, Vito. Answer. When the market is like firestorm hot, like it was back before April 22. Where the only way you were gonna get an offer accepted is if you have zero contingencies, you better have enough to cover not only your down payment, but also an appraisal.
And closing costs and everything else. You're looking at 20%, there's a lot of sliding room there, right? Because you can go down to 10%, 5% of conventional or jumbo or how you, you do all that magic, all the number in sh the, p in the shelves there game. But you need to have that conversation with the client saying, look, if this comes.
this is how it's gonna be today. We have more buyers than we have sellers. There's houses that are sitting on market 30, 40, 50 days, and those concessions are being dealt out there. There's less con contingencies so that the loan contingency, which this is this perfect example, if you came in and you're right at the top of your D T I and all of a sudden there's a lease there and that has to go into your D T I and it pushes you over.
There's some magic that Scott can do, but he can only do so much and if there's no way you can qualify for that house anymore, for that loan anymore, then you're, you have to cancel that contract. And if you have that, if you don't have that loan contingency in place, you're out that deposit. That's right.
You could lose 3% of the purchase price. And when it's a million dollar house, that's $30,000. That's a lot of money to walk away from, so be very careful. So one way to protect against that if you are the buyer and solar panels on the home, regardless of if it's leased or if it's finance, if there's a payment there, you need to let your.
Mortgage person, no. Right away. And then rerun the numbers. So typically if you are shopping for a home, especially in the Bay Area, like Vito said, contingencies are all typically removed. So you've been approved for that loan, but they have to rerun the numbers with those panels and make sure that you're fully underwritten and.
For that specific instance before you even write an offer without contingencies. A absolutely. That front end work is so important and if you're selling the house, disclose Yeah. It doesn't cost you anything to give your real estate agent all of your invoices, your receipts for the last five to six months so that Scott can take that and say, okay, on average, this is how much it's gonna cost.
I do have a question for you for you guys. So when it comes to the loan, does it show the full loan of the, solar system or does It's an attachment on the prelim, yeah. Okay. All right. I don't know if it's just our finance company or, what, but basically they have it to where it only is going to, because it's a utility loan basically.
It's only gonna show the monthly rate in terms of the dti. I dunno if it's just our finance company that was able to work that. the one that I go through, but they, were able to confirm that and we, I haven't had any issues. Yeah. Maybe, that's just the there's different ways for it to breach to show up on title.
Okay. So the interesting thing that, about these lease panels where they weren't even on title, so actually it wasn't even a condition of closing, which is sometimes we'll, ask for the promissory note sometimes and get as much of the data as we can, and then dig a little deeper on the front end.
Gotcha. You, okay. So that's, where the, so that's really the mortgage. Professional who does that and because their main job is to make sure that the buyer can afford the payment. Absolutely. Okay. So even if it doesn't show up on title, you're still doing your homework on the backend to see what the deal is.
Is that, yeah. Okay. Yeah. So, please always, let your mortgage professional know upfront because we have the tools to do the digging to find out. But if, we're made aware of it at the last second, it can be a. So we're not gonna see the property most of the time and that's so, helpful to let us know right away if it's a possible solar situation.
Okay, perfect. Thank you. So while we're on the subject what if you're a homeowner preparing to sell your home, you have solar, what items should they prepare beforehand, before going on market? We. The solar grills. Lee Speedo, . I, like cupcakes. So when I show up to your house, cupcake pie. I love pie.
Apple pie is my favorite. Coffee is okay. I'm okay. Yeah. And But yeah. Here's the thing. You should have a go file of everything that you ever did, not just for Scott or me or the buyers or what for taxes, right? Every improvement you've ever done, you should stuff that receipt into the little file of everything, right?
Anytime you pull a permit, anytime you pull, do any kind of improve, you replaced a light switch. have the receipt in a file so that we can go back and I know that it's a pain in the butt. I've been in my house for almost 20 years. You should see how thick my go file is. It has everything in it. And it's just something that you want to have, but you absolutely should have that file.
And a good solar company will actually have your lease on them. On, file. You want to have five to six months of the back receipts, your invoices that you paid, because a seller, a buyer's gonna want to know what your utilities are, not just for solar, but for electricity and gas and water, and what, I should go to what? Cable comp, right? So you need to know all of that. And if you have that all on a file, we can just thumb through it and figure it out and say, yes, we need this stuff. The rest of this stuff save for taxes. All right? Yep. And apple pie. You're a marine apple pie.
Thank you for your service. Yeah. Thank you. Scott's a squid too, I'm I actually just got outta the Coast Guard January 2nd, so Right on. Thank you for your service. Appreciate it. You got three vets on Harry. Did you expect that cross? Huh? . My uncle was in the Coast Guard and he was on a ship years ago, way before I was even born.
And he loves sun tanning. He's just, that's his thing, right? So he was on top of the, everybody was down below eating. and he was on a clipper ship. I don't know what kind of ship. And the captain turned the boat and he flipped over in the middle of the Pacific Ocean . And typically when that kinda stuff happens, Scott, when you're on a ship, they don't turn around, but somehow some miracle they found him.
They found him missing. Hey, where's Carlson? No la And then all of a sudden they met an overboard drill and they figured it out and they actually found him floating like 45 minutes later in the Pacific Ocean. Cause someone like me, a rescue swimmer found him. Yeah, that's hilarious. You're probably sleeping three.
So Zach, you know you have really great VA benefits when it comes to buying a home. So maybe that your next discussion, Absolut. No, I appreciate that. Yeah. And I, definitely need to get more educated on that side as of just getting out. Cause I'm gonna be looking here soon. So you're in Santa Rosa?
I'm in Santa Rosa, but I rent an office down here in Millbury, so I'm gonna be moving down here in San area. I have a good friend who works for, what's the county up. Santa Sonoma County. Sonoma. So up there Sonoma. Alright. Sonoma. Yeah. Sonoma's up in like the Santa Rosa is Sonoma. Yeah. So he's, a deputy sheriff for Sonoma.
I served with him in the reserves, in the marine reserves and Okay. His job is to hang underneath the HEL helicopter and rescue people. Oh yeah. I have a couple friends. Actually the, base that I was working at in Petaluma, we actually trained the rescue swimmers. Oh, that's cool. You probably know 'em then.
We we had coast, coast Guard guys going through with us and a rescue swimmer training back in Pensacola. It was okay. Yeah. Nice. That's cool. Small work, right? . So that about wraps up that discussion about solar. We covered all of the 2 20 23 updates, N Eem 2.0 to two point or 3.0 happening in April. So if you are thinking about going solar, now would be the time, right?
Zach? When is the cutoff to be grandfathered into N Em 2.0? So we have a couple, we have a couple installers or install companies. Like I Jeff has mentioned he added on the layout and it's slide. The main thing that we wanna focus on, the interconnection agreement, that's what solidifies you into being in the n e M 2.0 and being grandfathered for 20 years.
That typically takes about six weeks by the time that you actually sign the documents. So by the time you sign the documents, it's gonna be six weeks. So we're looking at. a soft date would be February, like February 1st would be like the best no later than February mid-February just to be, just to have that buffer.
Okay. It's pretty soon. It's pretty soon. It's right around the corner. So after that, you're gonna have to buy a battery, which is like 10 K or something. And that's, the cost of. . Yeah. So batteries start out at anywhere from 10,000 to 21,000. For a $10,000 battery, you're looking at least a $60 increase a month.
Okay. That's the biggest change. So for my client, he was at 1 63 a month. He would be paying 2 23 at a minimum if we sign today. All right, so that's definitely a key update this year. Aside from all of the solar benefits, obviously there's a lot more to consider in terms of choosing the right company.
Things to consider when it comes to selling your home in terms of financing and getting that buy new buyer to assume that lease. Any last comments about going solar? I'll, say, Hey, with mortgage rates going up Why not go solar and save some money there? So help offset the increased payments in your mortgage.
Great time for it. Quiet. I've been happy with my solar. Yeah. All right. So solar's a great way to go. You're, you get locked in. So that's the thing. When you buy a house, I say you get economically locked in unless you refinance. That's more on Scott's side. But you get locked in if you rent a house.
And it's $2,500 a month, and then your rent can go up at any time, right? There's certain rules, but you can go up and every year it probably will. If you buy a house for $3,000 a month, you get economically locked in at $3,000 a month unless you refinance. And for 30 years you're paying $3,000 a. . It's the same thing with solar. If you get solar right now, you get locked in at that price, whatever that is. The 163 or whatever Zach was saying, $200, 200, whatever it is, in five to 10 years, it could be $400 a month. I know my neighbors right now are paying four, $500 a month because cuz of the heater and they're, it's cold out.
But that's pretty standard these days. So you're saving money right away and you get economically locked in for the next 20 years. So you're doing yourself a favor. Yeah, absolutely. I do have one tip real quick for anyone that is going out there and doesn't go solar with us, which I don't know why you guys wouldn't calls out whenever you guys
Yeah. Just real quick Whenever you have someone come to your door and you're gonna be purchasing a system, you want to make sure where you see how Carla was talking about the 70% offset. That means that you're only getting 70% usage. You need to make sure that you're at least a minimum of a hundred percent.
But not only that, you need to have that. We as a I leverage, we actually add an extra 20% to add a buffer period. Say if you wanna run your heating, your air conditioning a little bit more than normal your usage is not gonna be the same every year. I don't care if you're the same fam family living in this, in the home your usage is not gonna be the same.
It may be a little bit more, maybe a little bit less, but you have that 20% cushion. If you want to get electric cars, if you wanna add a pool, if you get two electric cars, whatever it may be, that allows you to stay away. Keep yourself from getting a true up bill is what they call, where you have to actually o, pg and e or whatever utility company services you.
That's my one main thing is you gotta hook, you gotta be able to have the the solar company hook you up with extra production for that cause, especially right now where you're able to get grandfathered in to actually receive credits. . So that is such a great tip. Thank you for sharing that.
So don't settle for anything less than a hundred percent. Output, is that what it's called? You said a hundred percent output, but I would honestly honestly, don't just do 120% just to be safe. Just to be safe. . Okay. And so if anybody watching this now or in the future finds any value in this and wants to consult with Zach, Jeff, Scott, Vito, or I We are happy to do a group consultation with you if you want.
Maybe a home value comparison. If you're thinking about getting solar, I wanna know if it's actually how much value it's gonna add to your home and I are happy to do that for you. Refinancing, it sounds like maybe if you have solar on your home, that's something you may wanna consult with Scott about.
And then of course if you're thinking about solar and you want. To discuss that with a trustworthy solar expert. Zach will be here. So thank you all for being here today and until next time. Awesome. That was good. Thank you guys. Awesome. Thank, you.
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