Is Home Automation an Asset or Liability When Selling or Buying a Home?

Home automation systems have been a major feature of high end luxury homes and cottages for the past 20 years. When done properly, these systems can add huge value to the selling price. On the other hand, there are potential liabilities at hand that are not easy to find or assess.

How can you tell if home automation is a big selling feature, or a Pandora's Box of problems for potential home buyers? It pays to know what systems are in place. There are many different manufacturers and installation companies. While all are potentially good, in the appropriate home, quite often systems are designed, installed, programmed and maintained improperly.

It may sound great that there is a fully integrated control system with LCD touch pads, Ipad integration, lighting control and a dedicated home theatre. It's important, however, to ensure each one of those systems, along with any other that are part of the home, function properly, are maintained regularly, and all proper documentation is available for the new home owner.

There is no government regulation of the custom electronics industry. There are no standards for workmanship, or products. There is no inspection process. Home owners are at the mercy of installation companies, which may, or may not be, qualified to do the work. There are many home owners who have been sold home automation by skilled sales people, only to be disappointed by an installation that fell far short of the promises made.

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Types of Systems

Almost every electrical product in the home can be part of a residential electronic system. Some are obvious, and some you might not think about.

Here is a list of systems that can potentially be part of a fully integrated home automation system. • Whole home audio and video distribution • Home theater • Lighting • Security, • Closed circuit TV • Access control (doors, gates) • Climate control • Major appliances • Automated window coverings • Video games (Playstation, X-Box, Wii, etc.) • Sprinkler system • Golf simulator

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When assessing a home automation system, here are some important things to consider.

Is the Home Automation System Working?

It's vital to verify that a home automation system is fully functional. It's not easy to tell whether all of the electronics are working as intended. If not, there could potentially be expensive service and maintenance costs in order to get the system running.

If a system is not functioning properly, it may be due to various issues:

• Improper system design… the Central Processor (main controller) may not have enough computing power to handle the number of systems it controls

• Improper installation or programming… while home automation has the capability of controlling every technology, incorrect wiring, terminations or programming may result in poor functioning.

• Lack of maintenance… just like an automobile, a home automation system requires regular maintenance and service, in order to ensure long-term reliability.

*************************************** Was the Home Automation System Properly Serviced and Maintained??

• A properly functioning system is almost certainly maintained regularly. For more complex systems it's most likely that it's been maintained by the installing company.

• It's important to find out whether the home automation has been properly maintained, assess the condition, and provide a suggested maintenance schedule.

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Who Owns the Programming Code?

Make sure that the programming code is part of the home automation system. If the sellers do not have the code it will be more difficult and expensive for the purchasers to maintain and upgrade the system.

Home automation programming code is proprietary, and quite often owned by the installation company, or their programmer. It can cost upwards of $10,000 to obtain the code, and even more to replicate it, through reverse engineering.

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When You Come Across a High End Home Automation System, What Should You Do?

Call a highly qualified electronic systems professional. They will be able to properly assess the systems in the home and give an appraisal of the system's fair market value.

They'll be able to tell you what type of home automation system is in the home, and perform an assessment of the condition and functionality. They'll also be able to tell you the manufacturer information, and ascertain whether the system is an asset or a liability.

An electronic systems professional will be able to tell you whether the system has been properly maintained. Just as the receipts are important for someone buying a used automobile, they are equally important to a new home buyer. Many home automation systems have multi-year and lifetime, transferable warranties.

For home automation systems, an electronic systems professional will be able to tell if the home owner has the programming code.

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Manufacturers

Here is a list containing most of the major manufacturers for home automation. The majority are designed to be installed by professionals. A couple though, are intended for "Do It Yourselfers": • Crestron • Lutron • Vantage Controls • AMX • Control4 • HAI • X10 • Savant • Colorado V-Net • Netstreams • Elan

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Liability or Asset?

Once the value of the home automation system has been assessed, all parties involved… sellers, purchasers and agents… will not only know whether it is an asset or liability, they will also know the approximate, real-world value of the system. This will eliminate confusion in the negotiations, and allow for a fair and proper price to be added to (or subtracted from) the purchase price of the home.

With the potential value of a system adding tens or hundreds of thousands of dollars to the value of a home, you want to make sure the proper value is placed on the home's electronic systems.

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