Consumer adoption of smart home technology has soared over the last few years, with new home builders installing several smart home features for buyers. By now, it’s not just tech-savvy real estate agents wondering, “What are smart homes?” Consumers also are curious about this trend. I’ll dive into smart homes: what they are, the importance of smart homes in real estate, and the pros and cons for your clients. Let’s get started! 

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What Is a Smart Home?

So, what are smart homes? A smart home can be as simple as a home that has one or more smart devices installed that connect to devices and appliances. Examples include lights, plugs, blinds, advanced security systems, smart fridges, HVAC controls, and sprinkler systems. These items are controlled remotely with your phone or voice. 

There are also more detailed smart home setups with a dedicated hub to connect multiple devices to the internet and run automations like slowly dimming the lights at night, automatically turning off the television, and arming the home. Your home doesn’t need a full setup to be considered a smart home—just a few devices will suffice. 

Smart home technology has exploded in popularity—sources show that the smart home will be over $100 billion in revenue in less than five years. The great thing about a smart home is that you can make it as smart as you’d like. 

U.S. Smart Home Revenue, outlined in billions of USD. It's predicted to surpass $100bn by 2028.

To further explore how these technologies are reshaping the industry, discover the top real estate apps that can help you stay ahead. 

Examples & Costs of Smart Home Setups 

A smart home setup differs for each home. You can start for less than $50 with a few smart bulbs or a video doorbell. Some owners set up more detailed systems with a central hub and dozens of automations, like dimming the lights at bedtime, securing the home alarm automatically, and setting the thermostat. These setups can run into the thousands, depending on how many smart devices you use and how you choose to integrate them. Smart homes automate routine tasks for your comfort and convenience. They also provide easy and accessible controls over your home environment. Plus, a smart home can be eco-friendly—which means savings on those rising energy bills!

Hand holding a cell phone that is set up with smart home technology.
Smart home setup options (Source: Tuff Techies)

For real estate professionals (and homeowners) who are new to the world of smart home technology, it might seem a bit overwhelming. Fear not—it’s an effortless blend of convenience, efficiency, and modern living. Here’s a simplified breakdown of what an ultimate smart home setup could look like: 

  • Smart lighting (starting at $10-$2,500): Imagine your home responding to your presence with lights that automatically adjust for time of day or mood—plus energy-saving LED bulbs that last longer and reduce energy consumption. Example: Philips Hue, Govee
  • Intelligent climate control (starting at $65-$3,000): A thermostat that learns your schedule and preferences to ensure you don’t waste energy and that your home is always at the perfect temperature. Example: EcoBee, Google Nest
  • Advanced security (starting at $100-$2,500): Home security at your fingertips can offer you peace of mind. Think smart locks, video doorbells, and smoke alarm detectors you monitor with your smartphone. Example: Ring Doorbells, Schlage Smart Locks
  • Efficient kitchen gadgets (starting at $250): Smart fridges help you keep track of your groceries and suggest recipes. There are also smart ovens that you preheat on your way home. Example: Samsung fridges, smart coffee makers
  • Automated cleaning (starting at $250): Robotic automated vacuum cleaners, moppers, and mowers take the manual labor out of home maintenance. Example: Roomba
  • Voice-activated convenience (starting at $35): Control your home with simple voice commands—turn on the lights, play music, set alarms, or check the weather—while making technology accessible to everyone. Example: Amazon Alexa, Apple Homekit with Siri

Example: My personalized purple and red lights awaken me in my kitchen while my morning playlist softly plays automatically in the kitchen. At 7:30 a.m., my lights brighten and change to white while the daily news, my calendar, and weather let me know what the day looks like. Throughout the day, my lights change with the sunlight to brighten at noon and dim after sunset. At night, I have a “good night” automation to turn off all the lights in the home, turn off the television, arm the security system, and turn the heat down to 64 degrees.

Curious about more innovative process setups for real estate agents? Utilizing real estate software can provide streamlined solutions for real estate professionals looking to streamline their business. Find out more in our article, Best Real Estate Software: Our 38 Top Picks for Agents (+ Pricing).

The Evolution of Smart Homes in Real Estate

What are smart homes? Consumers have been clamoring for smart home real estate tech for years. (Shoutout to the late-night infomercial for The Clapper). Do you remember, “CLAP ON *clap clap* CLAP OFF *clap clap*”? We might think that tool is old, but in terms of smart homes, real estate has been advertising new technology for decades. Think back to the imagined “homes of the future” from the 1960s.

Westinghouse commercial for the “Smart Kitchen of the Future” (Source: YouTube)

Funny enough, smart home technology is arguably still in its infancy. But smart home adoption is picking up speed at an astonishing rate: Just 10 years ago, a little under 15% of Americans had a smart home device. Current projections indicate that roughly 57% of U.S. households will have at least one smart home device by 2025.  Even large corporate homebuilders like KB Homes have started integrating smart home technology in new homes. 

As of 2023, the interest in smart homes has seen a huge uptick. The most common smart home devices included smart TVs, speakers, and digital streaming devices. For our readers, it’s time to get excited and involved in smart home tech. The signs indicate that the next frontier for smart home tech seems to be security, safety, smart appliances, and energy management—it’s time to start brushing up on smart tech, real estate professionals! 

By 2026, it’s expected that more than half of U.S. households will be using smart security devices like door cameras, smart locks, and security systems. However, smart speakers have been harangued regarding internet security and privacy concerns. The growth and demand for those types of devices, like Alexa and Sonos speakers, could stall without companies addressing those issues. Understanding and leveraging this evolution in the smart home space can provide a competitive edge for agents. And to stay informed on future tech trends, brush up on your insights from the best real estate predictive analytics companies

📌   Pro Tip

Sellers might ask for your recommendation on how to upgrade their home with tech. Here is some simple advice on upgrading to a smart home, real estate agents: Upgrades shouldn’t be too complicated. You don’t need to shell out thousands. An easy upgrade (that can also be a selling point) is a smart lock. Clients might also want to install smart cameras for showings. Video surveillance is generally permitted without consent. However, audio recording laws are stricter, usually requiring the consent of one or all parties involved, depending on the state. You might want to outline the legal risks for your clients. Ensure you’re providing notice to potential buyers. Some MLSs might even require the disclosure. It’s best to be prepared!

For more strategies on attracting tech-savvy clients, check out our suggestions on real estate lead generation ideas

Pros & Cons of Smart Homes

Smart homes offer a range of benefits to enhance daily living. However, potential smart device homeowners should consider the complexity, privacy, upfront costs, and dependence on technology. Don’t forsake the pace of technology too! It changes rapidly!

  • Convenience and efficiency
  • Complexity and frustration over setup
  • Energy savings
  • Privacy risks
  • Remote monitoring and control
  • Dependence on internet and power
  • Enhanced security and peace of mind
  • Upfront cost
  • Personalized living experience
  • Technology obsolescence

Remember: A thoughtful approach to integrating smart home technology can help maximize the advantages while minimizing stress. Don’t jump in and buy thousands of dollars of equipment to stress yourself out and get overwhelmed. Plus, remember that tech quickly becomes outdated and obsolete, also known as technology obsolescence. 

Start small. From experience, outfitting your smart home is a process that develops over time. It can also be a fun hobby—there are always new devices to play with and try out! 

The Value of Smart Homes in Real Estate

Good news—while we’ve outlined the positive benefits of a smart home—real estate values also benefit from smart home technology. Studies have shown that well-equipped smart homes can sell for up to 5% more. No, we aren’t talking about smart robot cleaners, mowers, or sprinkler systems. We’re talking about actual features that buyers are looking for. Interestingly, older buyers are looking for smart thermostats and features more than Gen Z and millennials. Perhaps because they’ve been looking forward to these features? 

There are a few points to make about increasing the value of real estate through smart home tech. Sellers and buyers of smart home real estate tech should keep a few points in mind:

  • For sellers: Most consumers crave smart security and thermostats more than smart appliances and entertainment. That could be a heads-up to your sellers looking at which items to upgrade in their homes. Understanding the nuances of real estate smart home technology is essential for today’s agents. 
  • For buyers: It’s important to remember that smart home-connected devices aren’t considered “fixed property” in real estate. These items don’t stay with the home unless indicated in the contract. Caution your buyers that if they want a feature in the home, ensure the sale contract denotes that tech. Looking for more ways to present these benefits to potential buyers? We can help level your sales pitch with compelling buyer presentations highlighting the benefits of smart home technology. 
  • For luxury buyers: A dream home is one that “thinks” for you after a long day at work, e.g., turning up the A/C in your home on a hot day during the summer. People are looking for connected solutions, not just a “wow” factor. They want usefulness and value from smart home products—not necessarily a clothes dryer that sends you a push notification on your phone when it’s done. After all, you’ll still need to fold that laundry.

According to the 2023 Coldwell Banker Global Luxury International Consumer Survey, the number one most important amenity that buyers desire in an international home purchase is “the latest smart home technology.”

Want to get more buyer leads? Consider checking out Zillow. It’s growing rapidly and sells display advertising next to listings in specific ZIP codes for Premier Agents. You can snag tech-savvy buyers in your area. Check out your ZIP code at the link below.

Check out Zillow Premier Agent

Implementing Smart Home Systems

Smiling man on his phone, his shelving is lit up in blue, with soft lights in his living room.

Home builders are constructing smart home real estate from the ground up. However, older homes can still easily be retrofitted to modernize. You’ll want to start with the basics—items like smart bulbs, switches, and smart plugs are quick to set up and automate. For example, a smart plug can turn nearly anything with an on/off switch into a smart device. You can easily automate lamps, televisions, space heaters, or even your slow cooker. 

As you grow your network of smart devices, you may need to invest in a hub. This tool is a central control for your devices. What’s great is that you can go a long way with most smart speakers like Amazon Alexa. With Alexa, Google Assistant, or Apple Homekit, you can set up a hub to use voice commands to control your devices, plus things like “add to my grocery list” or “tell me the weather today.” To make a lasting impression during your showings, you could incorporate our best real estate open house ideas tailored for smart homes.

Amazon Echo Hub, with controls for cameras, media, climate and lights; along with different bedrooms and routines.
Amazon Echo Hub, with controls for different rooms, routines, cameras, media, climate and lights. (Source: Amazon)

Remember: Most smart home devices have little built-in security or encryption. Setting up strong passwords and even multi-factor authentication is important to protect your devices. 

How Real Estate Agents Can Prepare for Smart Home Technology

As with any real estate trend, it’s important to arm yourself with the knowledge to provide your clients with the best service possible. For example, with smart home technology being included in new home builds and MLS entry fields, it’s safe to say that this is a growing industry. As the industry evolves, adding smart home tech to your real estate niche might be a boon to bring in new clients. 

Remind your clients they don’t need to shell out thousands of dollars for a smart home setup. A smart lock and a few well-placed smart plugs can make a big difference. Lean into the smart tech because it’s not going away. Interestingly, statistics show that older clients are very excited about these features. We, as real estate professionals, should be excited as well!

Are you a tech-savvy agent who craves using artificial intelligence (AI) and advanced lead gen tools for your business? Check out Zurple, an all-in-one lead generation tool that provides a website and robust analytics.

Check out Zurple


Bringing It All Together

As we’ve outlined, it’s clear that smart home technology is not just a fleeting trend. It’s quickly becoming a cornerstone of modern living (and real estate innovation). For real estate professionals and homeowners, understanding and embracing smart home tech can offer many benefits like convenience, energy efficiency, and even an increased standard of living. However, it’s not without its drawbacks. You’ll need to be aware of the inherent privacy risks associated with smart home technology and ensure you use a secure password and multi-factor authentication if possible. 

One thing is clear: This industry will keep growing and evolving, and it’s our responsibility to adapt and understand this technology for our clients. It’s an exciting time—we can help our clients redefine and enhance their living spaces. Our role is to advise sellers on strategic upgrades and help buyers envision a convenient, efficient future in their new “smart home of the future.”