Why the Internet of Things Matters to Real Estate
How you do business today will most likely be very different from how you do business in the very near future. Devices that can help us better control our homes, and better understand how we live in these homes will be prevalent on the market within the next few years. The more you know as a REALTOR® the better for your business. In this article, we are going to discuss what is on the market, what it means for your business, and how you can get more information on this topic.
To start, let's define the term Internet of Things. The Internet of Things refers to devices that you can control remotely and also gather data on their usage. There are different types of Internet of Things objects. In this article, we are going to discuss those objects that are within the home. You may have already heard the term smart home. This is referring to the vertical of Internet of Things devices that are made for the home. Mostly, these are everyday objects, like thermostats, locks, smart cameras, and lights. The data from these devices allow us to make better decisions about how we live. For instance, the thermostat can let you know what your average temperature is in the home and allow you to control it for your comfort as well as energy and money savings.
Why does this matter to real estate?
The first reason it matters to REALTORS® and real estate is because it matters to consumers. According to a 2015 survey from Coldwell Banker and CNET, it was found that nearly 45% of consumers either own or will own smart home technology by the end of 2016. Also, 54% of people selling their homes would add this technology if it meant their homes would sell faster. Of those 54%, 65% would spend between $1,500 or more. These numbers indicate a tipping point in this space.
The second reason it matters to real estate is because it matters to other industries. Utilities and insurance companies are offering discounts on their services, the installation and monitoring of these devices. As an example in Chicago, ComEd, the local utility company, is currently offering $100 rebates on smart thermostats from Nest and Ecobee if you enroll in their energy monitoring program. These devices typically cost about $250. Liberty Mutual will give you a Nest Protect, a $99 smart CO2 detector and smoke detector, and up to 5% off of your premiums if you install it. Such initiatives are enticing consumers to use these technologies.
Another reason it matters to real estate is because it could mean a great way for you to continue a relationship beyond the transaction. Giving these devices as closing gifts often leads to discussion about other devices. So, giving a new homeowner a smart device allows you to continue the discussion about what it might mean to have smart lights or smart plugs in the home as well. Simply put, the more you know about these devices, the more you extend your value proposition to consumers.
What issues are there around these devices?
With every new area in technology, there are benefits as well as challenges. Internet of Things and smart home technology are no different. There are challenges to be aware of, but that doesn't mean you shouldn't work with these devices.
For instance, if you are selling a home that already has smart home technology in it, you want to make sure you are resetting that technology before closing. If you do not reset this technology, the previous owner still has access to it. As an example, a home was sold recently that contained a thermostat in it. A few days later, the buyer called the agent and said that they couldn't control the thermostat, it was continually moving upward and raising the temperature. The agent reached out to the seller to find that the seller was changing the temperature because he still had access. So, to help you with this, we worked with the online trust Alliance to create a smart home checklist.
Another challenge can be around security and data privacy. The best advice I have for security is always make sure you use strong passwords. You can follow this link to find how to set strong passwords. Also, when you are looking at a product for purchase, search that product name along with the phrase 'security issues'. You can also keep up-to-date on issues around security on our blog at crtlabs.org.
About the Contributor
Chad Curry is the Managing Director at the Center for REALTOR® Technology out of the Chicago NAR office. Chad is available as a technology speaker for Women's Council Chapters. He can be reached at: firstname.lastname@example.org.
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