Diana Olick (CNBC) - Published 7:02 AM ET Tue, 10 May 2016
Twenty years ago, a porch light timer might have been considered smart home technology. Today, as demand surges for thermostats that "learn" your desired temperature throughout the day and refrigerators that tell you when you need more milk, the definition of "smart" is coming under scrutiny. That is because sellers and their agents are using the term to boost sales and prices.
"There was a perception that if you had a smart home it would sell faster. One-third of our agents said that was happening," said Sean Blankenship, chief marketing officer of Coldwell Banker Real Estate, which is owned by Realogy. "We need to have some sort of standard in our industry about what a smart home is and what it means. How is it relevant?"
More than a quarter of all consumers surveyed by Coldwell Banker own at least one smart home product, and nearly half of millennials (aged 18-34) have adopted the technology. That's why Coldwell Banker, which was actually founded in 1906 in a region of California now known as Silicon Valley, teamed up with CNET, a technology news and review website, to define the smart home:
- A home that is equipped with network-connected products (i.e., "smart products," connected via Wi-Fi, Bluetooth or similar protocols) for controlling, automating and optimizing functions such as temperature, lighting, security, safety or entertainment, either remotely by a phone, tablet, computer or a separate system within the home itself.
- The home must have a smart security feature or a smart temperature feature in addition to a reliable internet connection. It then must include at least two features from a list of smart options, including appliances, entertainment, lighting, outdoor sensors, and safety detectors.
The definition is also designed to help Coldwell Banker both educate and eventually certify its approximately 80,000 agents in smart home technology. This would help protect consumers against fraudulent claims by sellers in listings. The company is hoping the industry will adopt its standard.
"Embracing new technologies is a vital part of how Realtors identify, market and sell homes to meet the needs of their clients. In recent years, smart home devices and environmentally friendly features have become more important to buyers and are increasingly used as selling points by Realtors on a listing," said Chad Curry, managing director at the Center for Realtor Technology at the National Association of Realtors. "Realtors have a unique understanding of what features buyers value the most and communicate these attributes to buyers and sellers every day."
Having a clear definition could also allow home sellers and real estate agents to tap into specific demand. "We can start syndicating listings based on smart home searches, so we can start using data to offer a better search experience. It's more than 'three bedrooms, two baths,'" said Blankenship.