Consumer demand for smart-home technology is surging, with reports predicting the industry will reach $130 billion between 2020 and 2025.
Many clients, however, don’t understand what constitutes a smart home, how the technology works, or how it can affect a home sale.
To better educate your buyers and sellers about smart-home technology and set reasonable expectations at the start of a transaction, take a look:
Three Common Myths
1. Smart-Home Devices Boost Property Value*
While smart-home products can fetch a higher sale price, consumers say they find smart security (58%) and thermostats (56%) more appealing than smart appliances (34%) and entertainment (29%). That may be an indication of which items will add the most value to a home sale.
Buyer’s agent tip – Be capable of demonstrating smart-home features so clients better understand their value. Meet with the listing agent ahead of a showing to learn how the home’s smart system works, so you can show your client how it would fit into their lifestyle.
Listing agent tip – Consider creating a guide or fact sheet for buyers that highlights the benefits of the technology and addresses any concerns.
* Keep in mind that not all devices are considered “fixed property.” Sellers should indicate in the sales contracts which specific smart features are included in their home sale, so buyers aren’t surprised or disappointed.
2. All Smart-Home Devices Work Together
Many consumers think that as long as there is a Wi-Fi connection, all smart-home devices will automatically work in tandem. Different devices have different means of exchanging information, called communication protocols. Some wireless protocols use infrared technology, while others use Bluetooth, Thread, Zigbee, or Z-Wave. Make sure all devices are on the same wireless protocol.
Use a centralized hub – Buyers will likely flinch at having to manage multiple smart devices in different ways, so sellers with existing devices or recent buyers who plan on adding smart technology to their home, should be advised to use a centralized hub to control smart devices.
Provide extra caution to clients who plan to install devices themselves: Before they purchase, they should ensure that all devices are compatible with the hub they want to use. Recommend that clients ask for a demonstration during a home showing so they can see for themselves whether the technology works seamlessly together.
3. Smart-Home Devices Are Not Secure
Recent security vulnerabilities associated with smart phones, voice-assist devices, and other gadgets may have consumers worried that smart-home technology could further expose them to hackers. But as smart-home technology becomes more widespread, so do data security protections.
Protect sellers from identity theft – Remind clients that the data security of smart-home devices may be more at risk when being transferred between owners. Remind clients to remove administrative access, cancel or change account settings and logins, delete all personal information, and then reset all the connected devices to factory settings, says Sheryl Roth, an investigator for the Office of Technology Research and Investigation at the FTC. This will also protect the buyer by ensuring they have full administrative access to create new access codes, install critical security updates, set personal preferences, and have complete control of the system.
It’s a good idea to review with your clients theSmart-Home Checklist, developed by the Online Trust Alliance and the National Association of REALTORS®.
As smart-home demand continues to grow, keep up to speed on the technology’s newest advancements so you can educate your clients and help them make informed decisions.