Sacramento real estate appraiser Ryan Lundquist remembers when a house with plugs that included USB ports was a big deal. “Everyone thought it was so cool,” he says. “No one had ever seen anything like that in a home.”
Now, it’s a sideshow compared to other “smart” items sprinkled throughout a modern home. From voice-controlled lights and thermostats, to sprinkler systems and garage doors that operate via an owner’s mobile phone, smart technology is becoming a prized asset for homeowners. And that’s turning into a golden egg for real estate agents.
According to a new survey by Coldwell Banker Real Estate, nearly 1 in 3 Americans in 2017 reported having at least one smart product in their home, up from 1 in 4 in 2016. Forty-two percent say they would ask their real estate agents how they can use smart products to increase the value of their homes if they were to sell this year. And, 32 percent would want their agents to offer information on smart technology that homebuyers would consider a key factor in their decision making.
“The way consumers are buying up these products is proof of their popularity,” says Lundquist, who follows Sacramento real estate trends on his website, The Sacramento Appraisal Blog. “Just go into a store like Best Buy and look at all the items on the shelves: smart locks, personal assistants, smart security systems, smart thermostats. It’s amazing to see what’s out there.”
The fascination goes both ways. Between 63 percent and 77 percent of people who plan to buy a home in the next year would want pre-installed smart items such as lights, locks, cameras, thermostats, and carbon monoxide and fire detectors. In many cases, the interest stems from the fact that the buyers’ current homes already have such products, according to the survey.
What it means to be ‘smart’
According to Coldwell Banker and CNET, a “smart home” has at least three smart devices, one of which is a security- or temperature control-related product. According to Realtor Doug Reynolds of Better Homes & Gardens Real Estate in Sacramento, one of the simplest and increasingly popular ways to meet part of that requirement is with a voice-activated personal assistant such as Apple’s Siri, Amazon’s Alexa and Google Home. He cites a recent Pew Research study revealing that nearly half of Americans already own one of these devices. “And why not?” Reynolds blogs on his website. “They work cheap, they don’t ask for bathroom breaks and they can make life a whole lot easier one little voice command at a time.”
Upgrading a home with several devices to make it truly “smart” may barely dent a remodeling budget, making it easier to convince a home seller to pony up the cash. Apps for personal voice assistants are usually free. Smart hubs and voice-activated speakers are about $100, as are many Wi-Fi enabled surveillance cameras. A home security system that also ties into other smart devices costs about $60 a month. Smart thermostats start at about $250.
Another selling point: Going smart keeps money in the homeowner’s pocketbook. Devices that control indoor temperature, turn off lights in unoccupied rooms and determine when the lawn should be watered can save energy and water – which in turn lowers utility bills, according to Lundquist.
Buyers and sellers that consider smart upgrades to be too much work or perhaps too confusing are not completely off the high-tech radar. A report by real estate research firm T3 Sixty cites the Coldwell Banker-offered smart home staging kit as an example of an all-in-one way to bring any home into the Wi-Fi age. The kit includes a smart lock, thermostat, high-definition camera and lighting system for about $1,100.
“Brokers and agents can use these additions to really increase a listing’s appeal,” T3 Sixty CEO Jack Miller says. “When buyers see a motion-activated lighting kit that automatically flicks on lights when they enter a room, a nice-looking Nest Thermostat, and an Amazon Echo Show that displays information about the house, they undeniably recognize they are in a modern home.”
Another day, another dollar
All of this means a financial upside for those in the real estate industry. T3 Sixty notes that almost 80 percent of the buyers responding to the firm’s study would be willing to pay more for a smart home, especially those that emphasize security, energy management or entertainment.
However, it’s too soon for agents and brokers to abandon their traditional selling tactics, according to Miller. “Homebuyer demand is rising for smart home technology, but the trend is still early and will require a mountain of education to take off,” he notes.
And when it does, today’s “homes of tomorrow” will become the norm. “Keep in mind that buyers compare homes,” Miller says. “Once they encounter smart home technology, they will begin to anticipate it everywhere.”
Lundquist believes homes with standard, non-smart features will always have a place with buyers. “That plug with USBs or the thermostat controlled by a smart phone won’t carry an exclamation point with all people,” he says. “For many, it will just be mere bling that may or may not be the thing that helps them make up their mind whether to buy.”