Navigating the Smart Home: Utilities and Insurance Companies

A picture of a man standing at a crossroads in a redwood forest. There is text on the picture that reads Navigating the Smart Home

NOTE: At this year’s REALTOR® Legislative Meetings, I was talking about our work with Andrew Sims, CEO of Dayton Area Board of REALTORS®. I shared with him things we talk to REALTORS® about in our presentations, and at one point, he said, ‘That should be written down somewhere.’ I realized immediately he was right. So, I’ll start by doing that in this post.

When we speak at associations and brokerages, our standard presentation includes a lot of information about why REALTORS® should care about smart homes. The biggest reason is because other industries that touch the housing market are getting involved. Utilities and insurance companies are creating rebates and programs around smart home technology. Smart home devices will allow you to do things like:

  • monitor and save energy
  • keep your home secure
  • prevent extensive damage to your property

Knowing what is available and who is offering it is a great information for you and your clients. We will include links to more information in this article.

Utilities

I realized immediately smart devices would mean big things for how consumers use energy when I first saw the Nest Thermostat in 2012. These devices help consumers save 10-15% in energy costs. As I traveled and spoke, however, members weren’t too keen on its $249 price tag at that time. But around 2014, REALTORS® began sharing stories of rebates from utilities and energy savings for their clients. They were even sharing stories of how the thermostats were paying for themselves in a short amount of time. These programs have only grown.

ComEd, Chicago’s largest electric utility, is offering $100 rebates on certain smart thermostats. They’ve even extended rebates (amounts vary) toward the purchases of light bulbs, power strips and security cameras, and has a site dedicated to selling smart home devices with instant rebates included. Check with your local electric and gas companies to see what rebates they may be offering on these devices.

Insurance

In the insurance industry, smart home devices are being offered as ways to reduce premiums and risk. Specific smart device types that can be up for discounts are:

  • Locks
  • Cameras
  • Water leak detectors
  • Smoke/CO alarms

One such insurer is Liberty Mutual, an NAR REALTOR Benefits® partner. They are giving away a Nest Protect smoke and CO detector and up to 5% off of insurance premiums. You can find all the life safety and security products included in Liberty Mutual’s program by searching the Liberty Mutual site.

Another insurance company with an interesting offering is State Farm. They are working with camera company Canary to provide discounts on burglar alarm insurance.

Educate Yourself So You Can Educate Clients

These are just a few examples of smart home promotions you can find outside our industry and share with your clients. Companies like Nest and Ecobee have rebates and rewards websites you can use to check and see what’s offered in your area. This is very fertile ground and there are a lot of opportunities for you to connect with your clients by educating them on these discounts and programs. Search your local area for opportunities for clients and make sure they know what’s out there.

Things Thursday #020: What makes a city smart?, Microsoft entering the thermostat battle, and some great resources on smart homes for you

A hand holding our environmental quality sensor, which is called the Touchstone. It's about the size and shape of a bar of soap.

The Touchstone sensor from CRT Labs. This device will read temperature, humidity, light, CO2, VOCs, particulate matter and more.

  1. What are 10 key things that make a city smart? (via ReadWrite)
    This is a great roundup of what a city needs to be smart. From connectivity to sensing, ReadWrite put together a great roundup. If you’re interested in the real estate perspective on smart cities, we’ve got a series for you to check out called ‘The Building of Functioning Cities‘.
  2. And finally: Amazon Echo 2 incoming and more (via Wareable)
    Yes, this is a list of smart home/wearable items for you to peruse. They have some good intel on Amazon’s latest smart speaker as well as what Apple’s up to on the smart home front. Check it out.
  3. What to know about smart home technology: 10 smart home resources for REALTORS (via CRT Labs)
    Another roundup??? What’s going on with this list? 🙂 I would be remiss if I didn’t point you to our roundup of resources you can take advantage of to bolster your understanding of this emerging market. Why does it matter to you? Because it matters to your clients. Read on to find out more.
  4. Microsoft’s Cortana-powered thermostat is totally gorgeous (via CNET)
    This is definitely something to consider. A nice-looking thermostat from Microsoft and Johnson Controls. No pricing info yet, but keep an eye on this. It’s called the GLAS, it’s voice-enabled (with Cortana, Microsoft’s answer to Siri and Alexa) and it monitors indoor and outdoor air quality. If you want a voice-enabled thermostat now, check out the Ecobee4 with Alexa integration. If the $249 price point is keeping you away, you should look for rebates from your utility or insurance company.
  5. Touchstone: Environmental Quality Monitor for your home! (via CRT Labs)
    Finally, a look at what we’ve been up to. This device is not on the market yet, but take a look at our work. Really proud of our group here at NAR. Akram, one of our lab engineers, provides a pretty deep dive into what we’ve been up to with this device. I’m really proud of our team and their efforts to make this piece of hardware and the software behind it. They’ve been extremely supportive of one another and have collaborated better than I could have imagined. Kudos to them.

That’s all for Things Thursday this week. Have questions? Want us to cover something? Let us know. You can follow us on Twitter @crtlabs or Facebook

What to Know About Smart Home Technology: 10 Resources for REALTORS & Their Clients

Smart home technology is definitely here to stay. According to a recent report on consumer adoption of smart home technology, 79% said they own some type of smart home tech. Those that owned it said they would purchase more. Ninety-seven percent of consumers now know what smart devices are. This is up from 67% in 2015. Because of market awareness, there are several opportunities for you to discuss these devices with your clients. They may:

  • have interest in adding value to a home before selling it
  • be wondering if they should leave devices with the home
  • want to outfit their new home with devices
  • be curious about simply learning more

As more and more of these devices hit the market, consumers will ask you about the benefits and their needs. Below, we’ve compiled a list of resources for you to use to educate yourself and your clients on smart home technology.

Here are 10 resources that you can use in improving your understanding of smart home technology:

1. Smart Home Glossary and Smart Home/Internet of Things FAQ

The glossary and FAQ are good places to start. They give you all the terms that relate to smart home devices. From how these devices connect to what IoT is. It’s a compendium of the most asked questions we’ve received with respect to these devices. Help clients get ahead of the curve by sharing the links with them.

2. The Insecurity of Things: Understanding Security Issues Around the Internet of Things

Last fall, when the denial of service attack happened and most of the internet wouldn’t work, I wrote a 3-part series on the security issues around the internet of things. I looked at what you as a user of these devices can do to protect yourself as well as what manufacturers need to do to protect you. Security is paramount for these devices and this series gives some insights on what to do to make sure you understand the risks and how to mitigate them.

3. Smart Home Simplified 1-Pagers

Our Smart Home Simplified series of 1-pagers is meant to give you a high level overview of the different device classes in the smart home space. These 1-pagers are great tools for educating yourself, other agents, or consumers. You are able to share them with whomever you’d like. Add a link in your newsletter or other informational posts. Each sheet talks about the pros and cons of these devices, how they work and why consumers are interested in them. The 10 classes of devices we cover are:

  • Thermostats
  • Locks
  • Doorbells
  • Cameras
  • Indoor Air Quality Sensors
  • Lights
  • Hubs
  • Voice Activated Speakers
  • Water Leak Detectors
  • Smoke/CO Detectors

Each page will also provide you with a link to a resources page for that class of devices. Think we need to add another class of devices? Let us know.

4. CRT’s Smart Home Report

Last year, we did our first smart home report with our Research Group at NAR. This will be an ongoing annual report for the next few years. We are working to better understand your knowledge of the space and that of the consumer market. Use it to understand what devices are important to consumers and where there are opportunities to help support clients in their quest to understand this market.

5. Educate Yourself & Consumers on Incentives from Utilities & Insurance Companies

I recently wrote a piece on the value of understanding what rebates and incentives are being offered by your utilities and insurance companies. These incentives may or may not be known by your clients, but knowing about what is available in your area is of tremendous value to them. It also shows that you’re looking out for ways to improve their experience.

6. CRT Labs’ Things Thursday

On a semi-regular basis, we put together a round-up on the internet of things and talk about the implications for real estate. We look at the way in the future tech as well as stuff that you can take advantage of today. It’s a great list of links you can share with your team, other agents or clients.

7. CRT Labs’ Office Hours Every Friday

Our Facebook page is a great place to find resources. Every Friday, we hold Office Hours on emerging technology. They start at 3p Eastern and run for about 20 minutes. We love receiving questions and comments during the Office Hours so we can discuss with you and have active conversation on these topics. Like the page and be notified immediately of any live videos we are doing.

8. Smart Home Checklist App

Have you sold a home that had smart home devices in it already? If so, did you have those devices reset by the seller before transferring ownership? If not, the seller may still have access to the smart devices. To help with this problem, we created a web app called the Smart Home Checklist. This simple app will allow you to identify the devices in the home, aggregate them on a list and share that list with whomever you want.

9. Smart Home DB

The Smart Home DB is a great resource to find out more about specific devices. They have nearly 1,200 devices listed in this community-curated database. They also have user-generated plans for hooking up different devices and some how-tos. We are actually feeding the backend of our Smart Home Checklist from this repository.

10. IoT Podcast from Stacey Higginbotham

Stacey is an IoT industry expert and she has a great podcast on the topic of smart homes, smart cities and industrial IoT. She has vendors and industry experts talk about the market now and what’s coming.She’s even covered CRT’s work in the past on her podcast. Stacey’s expertise comes from years of covering technology for a number of news sites, including Fortune and GigaOm. Sign up for her newsletter and find out what’s coming next.

BONUS: This blog & CRT Labs

You might have noticed a lot of the resources I posted linked back to this blog. There’s a reason for that. CRT is one of the few resources thinking about the impact of emerging technology on your business. We talk to members about it, as well as speaking to industry experts, vendors, security groups, universities, government and research laboratories about you and your business. They see you as a valuable resource and are very interested in your feedback and work. So, use us as a resource. We do webinars, presentations and all sorts of educational outreach. Drop us a line if you’d like us to present to your group.

That’s it for this roundup. Are there any resources you’d like from us that aren’t listed above? Follow us on Twitter and Facebook and let us know.

 

What Will Be Your Homeownership Score?- IoT as a Metric

A bottom of a log exposed to show tree rings with a pixelated version overlayed to give the sense of a digital tree ring

What if data from how you lived in a home were like rings in a tree?

This past fall, I was on a panel at the RESO Conference in Nashville where we were discussing the impact of technology on the future and what it would mean for real estate. There was a lot of discussion around the internet of things, privacy and security and this led me to talk about how this data could be used in the near future.

I’d been thinking about something in particular with respect to the internet of things and data privacy for a bit. There is a lot of good that the data from these things can teach us. There are also a lot of challenges around this data too. For example:

  • Who owns the data?
  • What do the terms of service allow the device manufacturer to do with your data?
  • How do you make sure your data are deleted from these devices?

These are just a few of the questions, but they’re not the one that I’ve been wondering about. The one that keeps me thinking is ‘Will smart home data become the new currency of homeownership?’ Will metrics like average CO2, air quality and humidity inform whether or not you get approved for a new home? Will nicks and dings in walls be recorded by our smart devices and add to our ‘homeownership score’?

About the time I started thinking deeply about this concept, Chris, our Lead Lab Engineer, mentioned there was an episode of the show Black Mirror called ‘Nosedive’ that hit upon some of these themes. In it, the young woman lives in a world where anyone can rate you and that rating is used for access to exclusive things in the world. In order for her to climb up the socio-economic ladder, she needs to have a score of 4.5 out of 5. I won’t spoil the episode for you, but I will say that some of the scenarios I was thinking about appeared in this episode. Overall, we are all messy in how we live our lives, but under this type of intense scrutiny, it becomes less of an honest picture of who we are as we try to meet a standard. Believe me, I don’t like the thought of it, but I see the potential for it to affect a transaction. Data is a great influencer in real estate and IoT might amplify that impact.

Data and Real Estate

Data has long been the currency of real estate. Listings are THE main ingredient to the work our members do. Having fresh data is an advantage to their business. As the internet has matured, these data sets have transformed. Rather than just data about the house, we now have data around the house and the community. Is it walkable? What is the average price around the house? What type of businesses are in the neighborhood? Are there schools nearby? What’s my drive time to work? What will it actually cost me a month to own this home? This is all data your buyers and sellers have access to already.

What about the data the industry has on buyers and sellers? There are data packages you can buy on consumer behavior and use for analysis, and some brokerages are undoubtedly using them. We can know what magazines people subscribe to, what their buying habits are and all sorts of other stuff. There are companies out there now that provide leads based on a level of certainty that a homeowner might be ready to sell.

But what the internet of things offers is a richer data set that could be used in the same way a FICO score is used. It could give us a sense of how a home has been lived in and taken care of.

The Internet of Things and Incentivizing Private Data Access

The value of the internet of things is it allows us the convenience of control but also gives us insight into how we live. Think of personal fitness trackers. They provide data on how many steps we take on any given day as well as for other physical activities. This information allows us to make better decisions about how we live. Insurance companies and corporate health programs are taking notice and incorporating these devices into their costs. They are providing discounts to policy holders for access to some of the data on the wearables. People are willing to part with this data because there’s an added benefit to them for it.

So, wearables are already seeing programs introduced to incentivize good behavior. What about smart home technology? Are there incentivized programs for data access? The answer is yes. There are examples in the utility industry and insurance industry. A common example I use when speaking is that of thermostats. Utilities are incentivizing access to thermostats for the ability to adjust them to manage load on the grid. In Chicago, for example, our utility will give us a $100 rebate if we install a smart thermostat from either Nest or Ecobee. The gas company will give us an additional $50. The programs you enroll in allow access and control of the thermostats for the express purpose of keeping load down. The hidden benefit for the consumer is reduced energy costs as well.

Insurance companies are working on home insurance and smart home devices. Liberty Mutual will give you a Nest Protect ($99 smoke/CO detector) and up to 5% off of premiums if you enroll in their home insurance. There are also insurance companies funding multi-function sensors and offering discounts on burglary insurance with smart cameras being incentivized as part of these programs.

What Could Private Data Access Look Like in Real Estate?

Seeing how insurance and utilities are incentivizing this data access, what does it mean for real estate? How soon will it be until a brokerage offers rebates to homeowners who give them access to their smart home data? What could they use this data for?

One of the scenarios that I hate thinking about but see it coming is incentivizing access to this data as a qualifier for a loan. So, let’s say you’ve been living in a home for 7 years and you’ve decided you want to move. In order to qualify for a loan to move into this new home, you need to give the bank access to data on a few things:

  • How quickly do you change air filters in the home?
  • What was the average CO2 in the home?
  • What type of VOCs are in the home? How quickly were they mitigated?
  • What was the average humidity level in the home?
  • What does HVAC maintenance look like?

You get the idea. Things that don’t matter to us now are questions that could drive how we qualify. Why would humidity matter? If your humidity levels get too high, you will foster mold and bacteria growth in the home. Does this mean your an irresponsible homeowner? Not in my view…but to someone looking at this from a security of investment perspective, it could.

What if this led to variable monthly mortgage payments based on how well you keep the house up? Imagine if data from your air quality sensors would inform how much you pay. What if constant higher humidity levels affected your rates and cost you more? What if you could receive a ‘good owner’s’ discount based on the condition of the HVAC in your house (after an algorithm that looks at airflow, energy usage and regular maintenance determined you were a ‘good owner”)?

Again, I’m not a fan of data being used in this way, but I see a path to it. What do you think? Would you like to have this data used in this way? Would it help you? Would it hinder you? Leave your comments below.

Smart Homes & REALTORS – What do you know?

Smart Home Survey Featured Image

We’re really excited to write today about our new survey, which highlights the emerging technology needs of our membership and our work. We’re kicking things off with our first survey for CRT Labs: the  Smart Homes &REALTORS® Survey. This is an insightful look into what our members and their clients know about smart home technology and where we can help you learn and grow your business in the smart home space.

Member Interest in Smart Home Tech

One of the most exciting things we see in the survey is the amount of interest members have in smart devices and how they can use them in their business. Based on our data, it is not just new and young agents who are interested in this technology, but more seasoned members of the REALTOR® population. A prime example of this is seen in this question about interest in an NAR Smart Home Certification.

A percentage based bar graph gauging interest of NAR members in an NAR smart home certification. 42% of those surveyed are interested, 22% are not interested and 36% don't know if they are interested.

What we note is that almost half of those surveyed were interested in a certification program. The characteristics of those interested in a certification are surprising to me in a good way. Looking at the median experience, hours of work, and age, we see that members working full-time and near the overall median member age of 54 are interested in this type of certification; this type of certification appears valuable to industry veterans.

When we move to the second tier of characteristics and break down interest by years of experience, we see that over half of those who say they are interested in a certification had more than 16 years of experience. We also see that members aged 55 and up are very interested in this type of certification.

Currently, NAR does not offer such a certification or designation – but, if you are interested in gaining some knowledge on smart home tech and energy efficiency (and I suggest you consider it because younger buyers are very interested in these features), NAR does have the GREEN designation, with a section on smart home technology and advantages to clients with respect to energy efficiency as part of this designation. Also, if you are interested in getting a better handle on the terms and concepts behind smart home technology, check out our smart home glossary and our internet of things FAQ.

Client Interest in Smart Home Tech

One of the big reasons for NAR members to understand this technology is because your clients will be interested in what these devices can offer them.

Client Interest by Type

These responses are insightful, and confirm that security and privacy are top priorities for clients. Concerns around these two topics have been evident for a while and have become hot topics since the Mirai attacks. Start with our Smart Home Checklist (257 downloads) to help clients with these concerns. What is surprising to me is that comfort remains in the middle of the pack as far as importance of functionality goes. That’s typically been a big selling point for these devices. If you look at the “Very Important” slice by itself, you get the top 5 in this order:

  • Security 51%
  • Privacy 45%
  • Cost Savings 44%
  • Energy Savings 42%
  • Comfort 38%

When you combine the “Very Important” numbers with the “Somewhat Important” column, the functions shift:

  • Security 81%
  • Energy Savings 78%
  • Cost Savings 77%
  • Privacy 75%
  • Comfort 71%

Energy Savings and Privacy swap places. I’m not declaring anything definitive here, just highlighting an unexpected shift. Privacy moves down the list and Energy Savings rise. It’s not a huge difference between that and Cost Savings, but could be an indicator of future importance for these areas. We’ll be keeping an eye on this.

For us, another interesting function-related finding was that Air Quality rated low. My personal opinion is that this will shift in the coming years as more devices and projects become available and consumers are more aware of the impact that air quality has on comfort and energy efficiency. This is a vertical we are going after with our Rosetta Home and PiAQ projects. Air quality will be key in the function of a smart home. We envision a home that reacts and self-regulates to keep you comfortable and safe. These metrics from air quality will inform decisions made by your house.

What You Can Do

So what can you take from this report and use in your business today? Well, a lot! First, the most surprising graph to me:

screen-shot-2016-11-30-at-6-16-46-am

According to this, only 2% of you have given a smart home device as a closing gift. Most likely there are a few reasons for this:

  • Not understanding what’s on market
  • Cost
  • Concerns around privacy and security

Definitely start thinking about the potential of these devices, which are available at a variety of price points, as gifts. First, you can consult our gift guides here:

You can also look at our thermostat tear sheet for more options. Giving these devices as closing gifts are a way to keep the conversation going after closing. These devices last beyond a bottle of champagne and have the potential to offer improved living for homeowners. There is an opportunity for marketing yourself in a much different way.

In Closing

I wanted to close by saying that there is a lot for us here to work with to offer opportunities for you to help clients navigate the emerging smart home space. Smart home tech is here to stay for these reasons:

  1. Devices are becoming cheaper and more feature-rich.
  2. Security for these devices is becoming more important.
  3. Other verticals (utilities and insurance among them) are paying attention and penetrating the market with offerings.

Knowing what you’re interested in, combined with the ever-changing tech world, helps us at CRT Labs with our primary goals: to educate, innovate, and advocate for the future of technology and real estate.