The United States is the undisputed leader in smart homes globally. In 2018, $5.474 billion was spent on smart homes across the country, and this is expected to rise in the years to come. While smart home technology adoption is only 7.7% worldwide, the rate in the US is around 15%. From smart locks and smart appliances to new smart bulbs and smoke detectors, new smart home innovations are being released every year to make life easier for busy homeowners.
The rise of smart home technology also brings with it an increased need for caution and due diligence. Real estate professionals must have a working knowledge of smart home technologies — and what could go wrong — in order to sell smart homes.
We’ll explore some new smart home innovations, risks to watch out for, and best practices for handing over a smart home to its new owner. You’ll learn how to avoid lawsuits from smart home sellers and buyers. And, you’ll gain a better understanding of the benefits of smart homes, so you can sell them faster.
Smart home technology is advancing at a breakneck pace with the introduction of many new home solutions. According to Forbes, Amazon is leading the charge for voice assistants. It seems like only a few years ago that the world was excited about being able to turn lamps, lights and TVs on and off with voice activation. This has now extended far beyond what anyone 10 years ago would have thought possible — from automated locks, fridges and pet feeders to voice-activated irrigation systems for the garden.
Useful new smart home innovations for the homeowner include:
- Arlo Security Systems, which can be operated by smartphone from anywhere in the world. There is an option to sound an alarm remotely, turn on a light and even to speak directly through the cameras to would-be burglars in the home (or real estate agents showing the home!)
- Lutron’s Smart Shades which allow the homeowner to put the shades up or down with the click of a button on their smart phone from anywhere.
- August Smart Locks which enable homeowners to remotely control and track entry to the home. Specific timeframes can be set for visits, and you can unlock and lock doors remotely.
- Grohe Sense Guard that automatically finds leaks in water pipes and shuts off the water to avoid significant damage.
But, what if you’re showing a home and the door automatically locks, the blinds close, or you and your prospects are all under surveillance from the homeowner? Selling smart homes does have some risks you need to be aware of as a real estate professional.
Risks to Watch Out For
Productivity gains and lifestyle benefits also come at a cost, with privacy becoming a significant concern. If a home you’re selling has CCTV or surveillance cameras, make sure this is clear to all prospects who are inspecting the home, in case they don’t wish to be filmed.
Some new buyers have privacy concerns about what happens after the handover of a smart home. The last thing they want is the previous owner still having access to the system. Disclosure of all smart technology details is essential. Be clear about what smart systems are in the home, how access is managed, and how it is to be transitioned after purchase. (Follow our Best Practices for Smart Home Handover below, so new owners have peace of mind about privacy issues.)
Subscription Charges for Smart Home Systems
New owners need to be aware of any existing subscription charges for smart home systems that are transferred with ownership of the home. This can be communicated as part of the regular disclosure process.
Safety for Showings
Remote and automatic locking systems can be cause for concern when you’re showing a home. You don’t want to find yourself (or prospects) locked inside a home. This is a serious fire danger and security concern. Similarly, you don’t want access blocked to a home when you need to show the property. To avoid this situation, communicate early with the seller about how access to the smart home is to be managed. Arrive early to ensure there are no issues in accessing the property. Leave a door open so easy exit is possible should there be a technology fail with the smart home locking system.
Voice-activated assistants, such as Amazon Alexa and Google Assistant, have risen in popularity in recent years as busy people strive to be more productive and efficient. America’s love of gadgets and smart home technology is paving the way for more sophisticated machine-learning and artificial intelligence robotic solutions for the home in the future.
But, while technology experts continue to innovate in the smart home space, as do cyber criminals actively trying to breach smart home security for personal gain. Smart home systems and protective measures differ greatly. As a real estate professional, you’re not expected to be an expert, but you should encourage prospects to do their own research and due diligence when deciding to purchase a smart home.
Best Practices for Smart Home Handover
Preventing issues before they happen is the best possible strategy for real estate professionals. Follow these tips when handing over a smart home:
- Familiarize yourself with the technology in the home so you’re aware of the benefits and the risks
- Encourage new buyers to do their own research, so they can make an informed decision
- Disclose any information that could materially affect the sale or value of the home. For example, if there has been a recent security breach, this would need to be disclosed.
- Hand over plans of where the equipment is located at the home, as well as any manuals or help guides, information about resetting passwords and contact details of who to call if things go wrong.
- Ensure your real estate business is sufficiently insured in case things go wrong.
Insurance Protection for Real Estate Professionals
CRES E&O + ClaimPrevent® offers a premium level of insurance for real estate professionals. You’ll also have access to professional legal advice from experienced attorneys 7 days a week, so you can avoid lawsuits before they happen. Contact CRES today at 800-880-2747 for a confidential discussion. We can review your insurance needs and tailor a solution to suit your real estate business.