Monthly Archives: June 2022

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Home buyers who do mortgage loan shopping can avoid leaving money on the table.

Whether you’re shopping for new bed sheets or a new car, the drill is usually the same. Hit the reviews, check with friends, and scope out the best deal. After all, who wants to buy a car that racks up repair bills right away? Yet when picking a mortgage loan, borrowers don’t always think about comparison shopping.

In a Bankrate survey of recent home buyers, 12% of millennials said they believe their mortgage rates were too high. Some buyers may think that when mortgage rates are low, they don’t need to shop for the best offer. But even a few basis points can make a difference of thousands of dollars over the life of a loan, according to Bankrate, the Consumer Financial Protection Bureau, and    the Federal Trade Commission.

You may think mortgage shopping is about as much fun as prepping for a tax audit. It’s true that comparing home mortgages can get complicated. But you don’t need a finance degree to make an informed decision. Here are some steps to get there.

 

Find a Few Lenders

When looking for lenders to consider, loan officers recommend going to a few sources:

Locals you know and trust: “Make sure the lenders you’re comparing come from referrals from local people you know who’ve worked with them — like your friends or relatives,” advises Jeff Koch, senior vice president of residential lending at Draper & Kramer Mortgage Corp in Schaumburg, Ill. “Wherever you have trust established would be a good source.”

• Your real estate agent: “If you’re working with a real estate agent, find out if they have any feedback or advice on a lender or a loan officer,” recommends Jim DeMarco, branch manager and senior loan advisor at Flagstar Bank in Seattle.
• Online reviews: These can be a good starting point, DeMarco says. “If you see a lot of really good reviews, that means people are taking the time to provide them.”

 

Have an Intro Mortgage Loan Meeting

During a meet and greet, you and the loan officer will usually ask each other questions, and the loan officer will use that information to assess your qualifications. That may sound cut and dried, but the meeting should be fluid based on what you’re ready to do.

Typically, the loan officer would schedule a meeting focused on comparison shopping separately. If that sounds painful to borrowers who want to (literally) get moving, no worries, Koch says. “The borrower may be well versed and want to get right to what’s most relevant for them, which are the financial and comparison details. But a lot of people need to go over their own questions or cover key topics first.”

Want to meet virtually? “Some folks are just more comfortable virtually, and that’s OK,” DeMarco says. “I’ve closed loans with people I’ve never talked to on the phone. It’s all via text.”

 

Interview the Mortgage Loan Officer

Whichever way you choose, this meeting is prime time to interview the loan officer. Borrowers need to find someone who will be in there with them and can problem solve. “We call unanticipated problems ‘icebergs,’” DeMarco says. “You think there’s smooth sailing. And then, suddenly, you smack into an iceberg.”

Check out the lender’s communication strategy and their process for delivering on time. “The process is highly complex, and you’d think professional lenders all would have mastered it. That’s not the case,” says Koch. “When a loan isn’t delivered on time, people’s finances and lives are basically balanced on the head of a pin, which is the closing date.”

To avoid problems, ask questions like these:

Fact finding about the process:

• Would you take me through the process?
• What should I expect?
• What will I need to supply?

Compatibility with the loan officer or mortgage banker or broker:

• What’s your communication style? Are you willing to communicate virtually?
• When would I work with you? Are you available in the evenings?
• Will I work with you or a member of your team?
• What do you think of my time frame to get to closing?
• What if any problems do you foresee?

Track record of loan officer and lender:

• How long do loans you process typically take to close?
• How would you expedite the process if there’s a tight time frame?
• About what percentage of loans you work on close on time?
• How many loans have you worked on that haven’t closed or haven’t met deadlines?
• What’s the biggest problem you’ve had with a loan and how did you fix it?

 

Use the Meeting to Learn

You can also use the meeting to clarify general info you’ve picked up online and talk about your concerns. DeMarco gives a couple of examples. “You may have switched careers or industries in the last year or started having bonus or commission income. Your research may have shown you can just divide your salary by 12 to figure monthly income. But it may not be as simple as that.”

You’ll also want to bring up concerns like the impact on your credit score. Thirty-eight percent of buyers think comparing multiple mortgage offers in a short time will hurt their credit rating, according to a 2020 LendingTree survey. “As long as the lenders all pull the borrower’s credit within a couple of weeks, it’s counted as a single credit inquiry. So, it’s not a problem if they do it within a narrow band of time,” Koch explains.

 

Get and Compare Financial Information

Whether you’re looking at a federal form called a loan estimate or a precursor form called the fees worksheet, you’ll see a breakout of closing costs, explains Koch. “To compare the lender financials, you’ll want to drill down to origination charges in the lender section. Make sure you’re comparing apples to apples. If one lender is offering a 30-year fixed rate at 2.875% with no lender fees and another is offering 2. 75% with $1,500 in lender fees, those are unlike products. Get the fees at the same rate to find out which is less expensive.”

 

6 Tips to Get Mortgage Loan Information

Comparison shopping can get complicated. Here are six ways to keep it simple:

1. Keep Your Pool Manageable
   

Mortgage shopping “depends on the borrower and the personality type and how they’re wired,” Koch says. “The process can seem overwhelming. That’s why it makes sense to have a select few options to compare so borrowers can process and assimilate them.”

2. Get a Fees Worksheet

The best way to compare effectively is to zero in on the fees worksheet, which the loan officer should provide. “You’ll be able to figure out just what the lender’s direct fees are, and you can make a nice, simple comparison,” Koch explains.

3. Understand a Fees Worksheet Versus a Loan Estimate

The numbers on the worksheet are estimates and not locked in. Interest rates are fluid and change daily or even more often, DeMarco says. On the other hand, after you have a contract with a seller, “the loan estimate and loan application are where the information is binding, barring structural changes to the loan,” Koch says. Make sure the information reflects previous discussions with and disclosures by the loan officer.

4. Be Careful Interpreting Third-Party Fees

Third-party fee estimates are included on the worksheet. Two lenders could each come up with different estimates for title, escrow, or appraisal fees, Koch explains. But not all are negotiable. For instance, the seller chooses the title company, so the lender doesn’t control the choice or the fees. The lender could be choosing the high or low end of a range, but it’s only an estimate.

5. Think About Timing

Make sure lenders are using the same time frame for locking in pricing and that it will extend through the closing, Koch notes. “A lender might offer a rate that’s a lock for three weeks, but if you  anticipate or know your closing date will be five or six weeks out, that’s a problem.”

6. Consider Applying for Loan Approval Before Finding a Property

“Many lenders will not do this,” Koch says. “But some will allow borrowers to go through the formal underwriting process — not just pre-approval — without having a property. The borrowers can get a bona fide mortgage commitment with all of the major buyer financials truly underwritten at that point. Then when borrowers make an offer, they can close more quickly.”

You’ll have to invest some time and effort into comparison shopping for a mortgage loan and selecting a lender and a loan officer. But your return on investment can pay off over the long haul.

 

By: Lynn Ettinger

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Think twice before you write or receive a home love letter.

Did you hear the one about the dog who wrote a love letter? Not to his owner, but to a home seller. Well, actually the dog’s owner wrote the letter in Buddy’s voice. Buddy described how wag-worthy the house was and how much he craved a game of fetch in the backyard. 

Doggie ghostwriting, which happened IRL, is just one way home buyers are getting creative to motivate a seller to accept their offer. It sounds harmless enough, right? But buyer letters to home sellers can unintentionally create Fair Housing Act discrimination and risks for buyers, sellers, and their agents. And there are more-effective ways to offer what sellers value.

How Love Letters to Home Sellers Work

“A love letter is any communication from the buyer to the seller where the buyer is trying to set themselves apart,” says Deanne Rymarowicz, associate counsel at the National Association of REALTORS^®. “It could be an email, a Facebook post, a photo. For example, some buyers send elaborate packages with videos and letters. The communication has the intent of ‘pick me, and here’s why.’” 

Buyers who write the letters typically send them to the listing agents, along with their offers, says Paul Knighton, CEO and cofounder of MORE Realty in Tigard, Ore. “They ask, ‘Would you please pass this along to the sellers?’ They’re doing what they can to get their offer accepted, especially in a competitive market.”

Letters Can Risk Violating Fair Housing Act

While these love letters may seem harmless, they can create a problem if buyers accidentally reveal information in one or more of the seven areas protected by the Fair Housing Act, Rymarowicz explains. Those areas are race, color, religion, sex, disability, familial status, or national origin. “Buyers could say something like, ‘this is down the street from our temple,’ or ‘the hallways are wide enough to accommodate my wheelchair.’ Anything that provides personal information related to one of the prohibited bases for discrimination could result in a violation if a seller makes a decision based on that information.” 

Do Love Letters to Home Sellers Work?

On top of creating potential risk, love letters to sellers aren’t all that effective, Knighton says. Here’s a case in point. Several years ago, one of his clients got 14 offers overnight, ranging from $219,000 to $250,000. “A person who offered $225,000 wanted to send a love letter. I told him, ‘You’re writing an offer that’s $25,000 under the highest offer. A letter’s not going to help.’ He wrote it anyway, but the seller didn’t even read it and took the higher offer. The offer needs to stand on its own.” 

And seller apathy isn’t the only issue. Some sellers may be completely turned off, Rymarowicz says. “They may think, ‘This is a financial transaction.’” 

Beyond communication, the circumstances can suggest Fair House Act discrimination, she explains. Say an offer with a love letter got the house but was less attractive than an offer without a letter. “If the losing buyer doesn’t share characteristics of the seller and the winning buyer does, you could have a situation. If sellers accept love letters, it’s more important that they document the basis of their decision when selecting a winning offer.”

Tips to Avoid Violating the Fair Housing Act

So, what exactly should you do to avoid risk of violating the Fair Housing Act? Here are five tips:

1. Keep the contract in mind: Knighton says real estate pros at his firm talk to buyers and sellers about contract boundaries. “We say, ‘Please don’t communicate with the other party, because we are in contract negotiations and need to manage time frames.’”  
2. Focus on objective information: Find ways to differentiate yourself on objective terms. And talk to the agent about how to improve the substance of your offer, Rymarowicz advises. “Can you make a larger earnest money deposit? Can you give them a longer closing date?” 
3. Proceed with caution: The NAR discourages buyer letters to home sellers and advises caution, according to Rymarowicz. 
4. Talk to your agent: Don’t be surprised if your real estate agent brings up the subject. “If you’re the seller, the listing agent may talk to you about the potential for Fair Housing violations. They may ask if you want to accept the risks,” Rymarowicz says. If the agent doesn’t raise the subject of buyer letters, the buyer or seller can do so. 
5. Know your state law: Oregon passed a law governing how letters to home sellers are used. “Effective January 2022, a seller’s agent must reject any communication from a buyer other than customary documents,” Knighton says. A real estate firm filed a challenge to the law, though. And until the U.S. District Court for the District of Oregon issues a final decision, the state won’t enforce the law.

Even if a buyer letter to a seller focuses on the property and not the buyer, there’s little to be gained, Knighton says. “There’s risk, but the reward isn’t there. Instead, focus on writing a really strong offer. That’s what has to stand out.”

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If you’re following the news, all of the headlines about conditions in the current housing market may leave you with more questions than answers. Is the boom over? Is the market crashing or correcting? Here’s what you need to know.

The housing market is moderating compared to the last two years, but what everyone needs to remember is that the past two years were record-breaking in nearly every way. Record-low mortgage rates and millennials reaching peak homebuying years led to an influx of buyer demand. At the same time, there weren’t enough homes available to purchase thanks to many years of underbuilding and sellers who held off on listing their homes due to the health crisis.

This combination led to record-high demand and record-low supply, and that wasn’t going to be sustainable for the long term. The latest data shows early signs of a shift back to the market pace seen in the years leading up to the pandemic – not a crash nor a correction. As realtor.com says:

“The housing market is at a turning point. . . . We’re starting to see signs of a new direction, . . .”

Home Showings Then and Now

The ShowingTime Showing Index tracks the traffic of home showings according to agents and brokers. It’s a good indication of buyer demand. Here’s a look at that data going back to 2019 (see graph below):

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The 2019 numbers give a good baseline of pre-pandemic demand (shown in gray). As the graph indicates, home showings skyrocketed during the pandemic (shown in blue). And while current buyer demand has begun to moderate slightly based on the latest data (shown in green), showings are still above 2019 levels.

And since 2019 was such a strong year for the housing market, this helps show that the market isn’t crashing – it’s just at a turning point that’s moving back toward more pre-pandemic levels.

Existing Home Sales Then and Now

Headlines are also talking about how existing home sales are declining, but perspective matters. Here’s a look at existing home sales going all the way back to 2019 using data from the National Association of Realtors (NAR) (see graph below):

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Again, a similar story emerges. The pandemic numbers (shown in blue) beat the more typical year of 2019 home sales (shown in gray). And according to the latest projections for 2022 (shown in green), the market is on pace to close this year with more home sales than 2019 as well.

It’s important to compare today not to the abnormal pandemic years, but to the most recent normal year to show the current housing market is still strong. First American sums it up like this:

“. . . today’s housing market looks a lot like the 2019 housing market, which was the strongest housing market in a decade at the time.”

Bottom Line

If recent headlines are generating any concerns, look at a more typical year for perspective. The current market is not a crash or correction. It’s just a turning point toward more typical, pre-pandemic levels. Let’s connect if you have any questions about our local market and what it means for you when you buy or sell this year.

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When you’re not home, little doubts can plague you. Did I lock the door? Did I leave a key for the housekeeper? Is the AC still on full blast? Smart home devices can resolve those questions and ease your mind. They can also make your home more comfortable and convenient, and save you money. 

Once the exclusive domain of the super-rich and alpha geeks, smart home devices have become more common, user friendly, and affordable. You can equip your home with some basic smart devices like a smart thermostat, smart lighting, and smart door locks for $1,000 or less. You can run these devices with your smartphone or tablet. And in many cases, you can install them yourself; no electrical engineering degree required. 

Here’s what you need to know to get started in choosing the right smart home devices for your home and your budget.

What Are My Smart Home Goals?

Start by deciding what you want to accomplish, and that will lead you to a relevant device. If you want more security, consider a smart door lock. Are you looking for more comfort and convenience? Check out smart lights that come on right before you get home from work. Want to save money? A smart thermostat that uses artificial intelligence to control the temperature in your house may be the way to go. Do you crave a cool, high-tech gadget that’s downright Jetsons-esque? Go for a smart appliance like a fridge that can stream cooking videos.

Do I Need a Hub?

You don’t necessarily need a hub. In the early days of smart home tech you needed a dedicated device that tied all your smart home devices together. Back then, hubs were problematic, because not all devices were compatible with them, and their software needed to be updated regularly. Those old hubs are near relics now. These days, you can run your smart home devices through an app on your phone or tablet. Wi-Fi and the cloud have been game changers in smart home technology because they enable many devices to network together regardless of the make and the brand. 

Many homeowners use a voice assistant like Siri or Alexa as a de facto home hub by tying all their smart home devices to it. Once you do that, you can control your devices with a single unit. If you tie your smart home door lock and smart home appliances to your voice assistant, you can say, “Siri, preheat the oven to 350 degrees and unlock the door,” and consider it done. 

“Voice assistants have made so much more possible in the area of smart home devices,” says John Carey, vice president of Designer Appliances, a New Jersey retailer that specializes in smart appliances. “They can work with so many different products.”

Do I Need a Wi-Fi Connection?

You can run your devices by connecting them to a hot spot device, like a MIPS (Microprocessor without Interlocked Pipelined Stages), which lets you tap into a cell phone signal. A MIPS is basically a little computer that hooks your smart devices to the cloud via a cell phone network. You can also run smart devices through a hot spot on your phone or tablet. But you’ll get the best experience with Wi-Fi hooked up to the internet, Carey says. 

Can Smart Homes Get Hacked?

Although smart homes can be hacked, the damage a hacker can do is limited, says Christy Roth, director of offer management, home and distribution software for Schneider Electric in Nashville, Tenn. “Hackers can’t get to your bank account through your smart refrigerator,” she says. “But they could see what’s in your refrigerator or turn it off.” 

Although appliances can be at risk, homeowners are typically more concerned about risk tied to devices like smart locks and cameras. Carey says you’re better safe than sorry when it comes to security with smart home devices and appliances. “We recommend people set up a guest network that’s separate from their main network and connect all their smart devices to that. That way hackers can’t get on your network and onto your computer, where you store sensitive information.”

4 Smart Home Device Categories

Here’s a quick primer on four of the most popular smart home devices and some pros and cons for each.

1. Smart thermostats —They’re the top-selling smart home device. Around 33 million households in the United States had one as of 2020. “They’re the most natural place to start if you want to get into smart home tech,” Roth says. Smart thermostats let you create programmable temperature settings based on your schedule, the weather, and your own needs. Many smart thermostats incorporate artificial intelligence technology to learn your schedule and adjust heating and cooling according to when you’re home. They’ll turn off the AC while you’re at work and turn it on 30 minutes before you get home from work each day. “They definitely pay for themselves with energy savings,” Carey says.

Pros

• Smart home thermostats reduce the use of heating and cooling systems when nobody is home. If your HVAC runs less, your utility bill will be lower.
• They alert you when it’s time to change the filter and can tell you when your last maintenance check was, saving you costly repairs.

Cons

• They can be complex to operate. “Setting up the profiles for vacation and sleep isn’t easy, so people can end up ignoring them or overriding them,” Roth says. “And the AI can annoy some people so that they override it. That defeats the purpose of having them.” 
• Some require professional installation. 

2. Smart lighting— This includes smart lightbulbs or smart switches. Both can be controlled remotely, via your smartphone when you’re miles away or with a voice assistant when you’re at home. You can program them to turn on or off at certain times and control their brightness.

Pros

• Smart bulbs are simple to set up; you can screw them into a light fixture yourself.
• They are easy to scale up; buy more to enlarge your smart lighting system.
• They let you use whatever bulb you want because the switch is hooked to the cloud, not the bulb.

Cons

• You can’t get smart bulbs to fit every fixture.
• They don’t work well in fixtures tied to dimmer switches.
• They require rewiring to install. You’ll need to call a pro.

3. Smart appliances —Anything that runs on electricity is game for joining the Internet of Things, the ever-growing network of connected devices that talk to one another via the cloud. So, you can get smart microwaves that let you download cooking instructions for frozen food, smart ovens you can preheat before you get home, and smart refrigerators that alert you when food hits its expiration date. “Our biggest seller is smart washing machines,” Carey says. “They’ll alert you when your laundry is done, so you can get it into the drier before it sours.” 

Pros

• They look cool. What’s not to love about a refrigerator with a touchscreen that lets you see inside the fridge without opening it?
• They can cut your electric bill. Some smart appliances can calculate energy rates and schedule themselves to run during off-peak hours when electricity rates are lower.  

Cons

• They’re expensive to buy and repair. 
• If your internet goes down, your smart appliances become dumb ones.

4. Smart door locks —They let you lock and unlock your house with the tap of a finger or a voice command. No keys required. Smart locks enable remote access, so you can unlock a door to let in a guest while you’re at work. Some locks allow you to monitor entry and exit logs in real time, so you can see if the kids got home from school or if the dog walker arrived on time. Some allow you to set up entry codes that work for only a certain period of time, so you can control who has access to your house.

Pros

• You don’t have to dig in your purse or pockets for keys. 
• You can see who comes and goes at your house.
• Instead of giving out house keys to everyone who needs to get into your home, you can set a code for the cleaning person or the dog walker that only they use. 

Cons

• They run on batteries. If the battery goes dead, you’re locked out.
• If the power goes out or your Wi-Fi goes down, you won’t be able to operate the lock remotely.
• Like all smart tech, smart locks can be hacked. But they have a system that will notify you or the police of an unauthorized entry.

Smart devices are a smart investment as long as they add comfort, convenience, or savings that you value. You’ll be more likely to get what works for you after exploring the most popular options and their pros and cons.

 

By: Leanne Potts

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Your home’s interior lights want to help you have fun, feel better, and save energy. Will you let them?

It used to be we’d walk into a room and flip on the light switch, maybe slide the dimmer up or down a bit to change the brightness.

But that’s so old school. Instead, press a tab marked “Cooking” on a wall-mounted panel to let all kitchen task lights come up to full brightness while lights in the family room dim so the kids can play video games.

Or hit the button marked “Romance,” and the lights throughout the house go out while the lights in the bedroom ebb to a soft glow that turns a sultry blue.

Household technology is undergoing a transformation that’ll make lighting more integral to our everyday lives. Not only will we see better, but we’ll use light to alter our moods, protect our well-being, safeguard our houses, and save bunches of energy.

“Home lighting today is about lifestyle enhancements,” says Paul Nagel, technical adviser and consultant for Oquirrh Ventures in Sandy, Utah. “We want to know how to control light to create environments we’re comfortable in, and have energy efficiency while we do it.”

Related: Lighting’s Not Cheap: Here’s How to Do It Right

Lighting Our Homes With a Purpose

Today’s progressive lighting schemes aren’t about turning lights on and off; they’re about being partners in your lifestyle. The concept is simple: Imagine all your home’s light fixtures as a single system that can be programmed into a variety of zones. Each zone is dedicated to particular task or mood, and can be controlled by wall switches, a master wall panel, or a smartphone app.

So in addition to “Cooking” and “Romance” zones, you might have buttons for:

• Outdoor entertaining – Patio and walkway lights illuminate.
• Coming home – Triggered by a timer or a smartphone, the porch, entry hall, and kitchen lights come on.
• Nighty-night – Lights in kids’ rooms slowly fade out as they fall asleep.
• Vacation – Lights turn on and off in random patterns.
• Panic mode – All lights in the house flash on and off.

If walking over to a wall panel is too much effort at the end of a long day, you can call up an app on your smartphone or tablet and control zones while curled up on the couch. If your app is voice-activated, you won’t even have to swipe a finger.

Easing the Fear of Lighting Technology

Do your eyes glaze over at the thought of yet another layer of high tech added to your everyday life? Fear not: In the hands of a pro, zone lighting systems are relatively easy to install. Home automation companies and lighting contractors can retrofit your house with a single-zone system in half a day or, with more time, install a whole-house system.

You’ll get an easy-to-understand central control unit that “talks” with new switches, light fixtures, and bulbs that are specially made to receive wireless signals. You decide on your zones and, once everything’s set up, have the light throughout your house change intensity and color on command.

DIYers Can Zone Out, Too

Relatively low-cost mini-systems are coming to market that’ll let you install your own zones, even if your geekability quotient is near zero.

Philips Hue smart light starter kits feature smart LED bulbs, the Hue Bridge, and a variety of smart accessories to help you easily set up a smart lighting system. Screw in your light bulbs, plug the Hue Bridge into your Wi-Fi router, and download the Hue app. Add your lights to your system and you’re ready to go. The system works with either Bluetooth or the Bridge.

No Dim Bulbs Here

Other DIY smart bulbs are on the market. They’re made to replace any screw-in type of lightbulb. All you need is a free app you download to your phone so you can dim lights, change colors, and turn individual lights on and off.

(FYI: Smart bulbs also work via conventional on/off wall switches; you’re not locked into controlling them with an app.)

ilumi bulbs come in different strengths including the A19 Color Bulb800+ Lumens (60-watt incandescent equivalent) for lamps and sconces, and the indoor BR30 Color 1100+ Lumens (85-watt incandescent equivalent) for down lighting. You can download the ilumi app, connect the bulbs with your iOS or Android device via Bluetooth, and enjoy smart lighting throughout your home with no hub or bridge. You’ll need to have your smartphone within range of ilumi bulbs (meaning within 100 feet) so that your phone’s Bluetooth network, with its short-range capability, can talk to them.

LIFX has created smart lights that do more than illuminate, according to its owner, Buddy Technologies. LIFX Clean can be scheduled to emit high energy visible wavelengths that can eliminate bacteria in your home. And LIFX Nightvision can be set to emit infrared wavelengths that boost your security camera’s ability to see in the dark.

Using Light to Alter Moods and Stay Healthy

If you’re feeling blue, it may be the light. Light can affect our moods and, ultimately, our health. Just ask anyone with seasonal affective disorder, a type of depression characterized by low energy and poor concentration. MedlinePlus estimates that 10 million Americans have SAD. The therapy is exposure to more daylight or to artificial lights that mimic the properties of natural light.

The health- and mood-altering properties of light haven’t been lost on lighting manufacturers, who’ve come up with a variety of new home lighting products that claim to have health benefits. Although clinical proof can be hard to come by, the products are intriguing.

Dynamic lights vary between warm white (2600K) and cool light (5600K) so that the natural rhythms of daylight are reproduced indoors. That helps keep you happy during the depths of winter. Several manufacturers make dynamic lightbulbs, also called full-spectrum bulbs.

The Withings Sleep Tracking Mat can be installed with a one-time setup under the mattress, and the pad is compatible with most mattresses. The mat tracks sleep metrics including duration and onset; deep, light, and REM phases; continuous and average heart-rate; and snoring duration. On top of that, you can control lights and temperature by getting into and out of bed.

LEDs — The Energy-Sipping Superstar of Home Lighting

LED lights (which stands for light-emitting diode) point the way for the future of home lighting. Why? LEDs:

• Use only 3% of the energy of an incandescent bulb
• Last from 50,000 to 100,000 hours
• Have no restrictions on number of times they’re turned on and off
• Save energy and replacement costs, though more expensive initially

LEDs can be made small — really small. In fact, some lights are no bigger than the point of a pencil. That’s going to change how we illuminate our homes. For example, hundreds of tiny LEDs can be embedded in sheets of drywall to create walls and ceilings that glow.

Mixing Light and Home Automation

Lighting solutions can be standalone projects, but they’re often paired with other home automation features to create a holistic home environment that’s controlled by a single wall panel and app. For example, press that “Relax” button on your scheme choices, and as the lights dim, you’re surrounded by the soothing sounds of jazz.

Lights are essential components of home security systems, too, teaming up with video cameras, alarms, and motion sensors to keep your house safe, whether or not you’re there.

Another advantage of automated energy management systems is that they combine smart thermostats, Energy Star appliances, and lighting schemes to trim energy costs across the board, and that’s a future we can all live with.

 

By: John Riha

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You often judge a house by it’s good looks. But guess what? Now you can also judge it by its IQ. Long-buzzed about smart home technology — think smart thermostats, smart lighting, and app-controlled security systems — are moving into more homes. Smart home tech can up your coolness factor and make homes easier to operate. Plus, it may also offer perks when you sell your home one day.

Home shoppers are increasingly looking beyond that killer kitchen upgrade to a seller’s Wi-Fi signal and connectivity. This isn’t just a priority for the techie set. As smart home technology gets more affordable and easier to use, more people are adding devices. Half of U.S. consumers owned at least one smart home device in 2021, up from 35% in 2020, according to NPD Connected Intelligence. The number is expected to grow as homeowners look to save money, feel safer at home, and add convenience.

A Home’s Technology Smarts Matter

Here comes a potential home buyer. Motion-activated lighting automatically turns on as they enter. A smart thermostat adjusts the temperature for ultimate comfort. The smart robot vacuum is keeping the home tidy. The window blinds are adjusting based on the sun’s direction. And the smart speaker is telling them about the home’s features.

Seriously, wouldn’t you be a little impressed?

Four in 10 Americans have bought a smart home device since the COVID-19 outbreak and are more interested in smart home technology, according to a 2020 REALTOR.com study. “The pandemic has driven smart home technology forward,” says Angel Piontek, an associate broker with Coldwell Banker Elite in Fredericksburg, Va. “How we interact with our homes is becoming different. At some point, buyers will expect it.” 

The majority of real estate professionals surveyed by Z-Wave Alliance believe smart home technology can help in marketing a home, according to the organization’s 2020 report on smart technology. In fact, some real estate professionals are already using smart home features as selling points. You may spot more icons on online 3D tours of real estate listings that flag smart technology inside a home. Or, during in-person real estate showings, laminated placards may point to devices and highlight what they do. 

Smart Home Technology Costs and Buyer Preferences

Consumers between 18 and 34 said they would pay more for homes with home theaters, smart speakers in every room, and connected kitchens, according to the REALTOR.com study. In the 25 to 54 age group, consumers said they’d pay more for solar roof tiles and home battery packs. And for those 55 and older, solar roof tiles, smart doorbells, and security systems would be worth extra money.

It’s tougher to validate that smart technology can generate more money in a home sale. Anecdotally, real estate professionals believe it can: “If a home is marketed correctly and has smart home technology, it can sell for top dollar,” says Kristin Triolo, a broker associate with RE/MAX Platinum Realty in Sarasota, Fla.

Fully automating an entire home with higher-end systems could cost upward of $15,000. But an appraiser would factor in such a system at resale, according to Christopher Matos Rogers, an associate broker with the Matos Rogers Group’s Palmerhouse Properties in Atlanta.  

Boosting Marketability with Smart Technology

If you don’t already have smart home technology, some real estate professionals may recommend adding it before you list your home. Tech-savvy generations may expect it. And older adults may be drawn to such systems — particularly voice-controlled ones that support aging in place.

You can easily add smart home technology to modernize an older home and help it compete with newer ones. After all, many homebuilders offer smart home packages to outfit new homes with smart thermostats, app-controlled garage doors, smart lighting, door locks, and video security systems.

Smart home technology investments can range from $20 for adding smart lightbulbs to $20,000 or more for automated solutions that connect systems in one hub for an entire house. For $1,500, you can outfit your home with multiple systems like a smart speaker, smart lighting, and a smart thermostat to increase the home’s smart tech appeal. For about $5,500, homeowners could automate the lights, door locks, and thermostat, and install a smart speaker, hub, and smart plugs in three rooms, according to FixR.com.

Regardless of how extensive your devices are, real estate professionals will typically want to spotlight them. “Buyers may not have a lot of knowledge of smart home technology, but they do know and understand energy savings and cost savings,” Triolo says. For example, a Nest consumer survey estimates that the company’s smart thermostat could reduce a home’s heating costs by 10% and cooling costs by 15%. 

What Else Adds Smart Tech Appeal

Bigger brand names in smart home technology — like Nest, Ring, and Lutron — have instant name recognition when selling, says Piotnek.

Ease of use also counts. For example, having to open several apps on a phone to control various aspects of a home can feel cumbersome, says Ellis Gardner, a broker with Keller Williams Realty in Chattanooga, Tenn. But being able to say, “Hey, Google, turn on my lights!” shows convenience.

With smart devices, you’ll need to be clear about what stays and what goes with the home sale. “It’s a gray area with some of these devices on what’s considered personal property,” Piontek says. For example, digital assistants like Alexa or Google Home may be used as your smart home hub. But sellers may consider these personal property to take when they move. “So, it’s really important to get this all in writing so there’s no question at the end of a transaction.”

3 Ways to Avoid Misunderstandings About Smart Home Tech

Avoid misunderstandings about smart home technology with these three tips:

1. Find an agent with smart technology expertise. They can help avoid hiccups in selling a smart home and also tend to be savvy marketers of smart tech. Some real estate professionals — like Triolo and Gardner – have smart home certification and extra training through the Residential Real Estate Council, a provider of real estate education and networking. 
2. Identify which of your smart home technology devices or apps are real property versus personal property. In general, items affixed or hardwired to a house stay — likely your smart thermostat or any switches and mounts. If you plan to take your Nest thermostat or Ring doorbell, replace it before listing. The buyer could figure that anything in the house at a showing will remain with the house. 
3. Turn over the virtual keys. On closing day, “turning over the passwords in a smart home is like turning over the key to the front door,” says Gardner. For all transferable technology, reset it to factory settings to erase any personal data. Leave instruction manuals or website links for the new owners to open up new accounts. 

Smart home technology is improving safety, security, and convenience in homes. Homeowners should also consider the benefits they’ll have when they sell one day, Piontek says. Just like curb appeal, high home appeal may make your home a standout to buyers.

 

By: Melissa Dittmann Tracey

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