While it's certain that technology in the home adds value, it is the home's specific market that quantifies the value.

A technophile couple recently put their St. Paul, Minn. home on the market without the $50,000 worth of Crestron portable Web tablet touchscreen controllers, the A/V rack, high-end music management system and other technology systems equipment. A potential buyer made an offer but wanted all the equipment and was willing to pay extra for it.

In a face-to-face negotiation the buyer and sellers agreed on what would stay, what would be replaced with lower-cost equipment and what the final configuration would be worth.

Even Super Bowl quarterback Tom Brady is testing the waters on the value of home technology. Brady recently put his four-bedroom, 4,000-square-foot waterfront Boston area condo up for sale for $1.5 million. Brady bought the unit for $807,000 in 2002 and put in a 360-square-foot dedicated home theater and other built-in televisions that reportedly cost $200,000. Along with the electronics, the condo includes movie posters for "Scarface," "Braveheart," "Top Gun," and "Star Wars."

When it comes to determining the value technology systems add to a home's resale, it is almost necessary to look at it on a home-by-home basis—or at least on a very market specific basis. "What commands value is what is recognized by the market," says Joe Huffman, an instructor for the National Association of Master Appraisers and owner of home appraiser Western International Connections Inc. in Holt, Mo. "I am not going to pay you for something that the market doesn't recognize as valuable."

And he didn't. In 2003 Huffman bought a two-year-old house that had every room wired with an Internet connection, a cable connection and a TV antenna hookup. Huffman did not pay extra for the wiring system in part because he knew he was going to install a wireless Internet network and has never used the TV antenna connections.

There are things that people will recognize as valuable once they have been established in the home market," Huffman says. For example, he notes that in-home theaters are starting to become recognized as an added value in a home. "But then the value depends on the brand name of the system and how big it is. You never get dollar for dollar for the actual system. The thing that will really affect value is the design of the entertainment room. Will it be functional any more with new or different technology?" he adds.

Huffman cites an example of a room set up to accommodate a plasma TV that may not be of value to a homebuyer with a rear-projection system. He also states that the availability of multiple electrical outlets to accommodate equipment in every room will have a greater impact on resale value than installed technology systems.

Sizing It Up

Sean Wargo of the Consumer Electronics Association says, "We are attempting to benchmark what the average cost of a technology system is, though I have seen data suggesting it is around $12,000. The next step is figuring out how much of this is recoupable when you go to sell the house. That really depends on how the local Realtors and appraisers will handle it."

Carla Walker, accredited representative buyer with Chicago real estate agent Koenig & Strey GMAC, says, "You have to face the fact that you never get dollar for dollar on home improvements. It is a matter of knowing your market. If you add technology that appeals to the type of buyer you are, it can be a benefit because you usually sell to someone like yourself."

Bill Renner, director of single family finance for the National Association of Home Builders, says, "Technology advances are typically slow to be recognized in the value of a home. If it is a system that is easy to remove, appraisers are reluctant to include it in the price of a home."

Tim Andersen, a master senior appraiser and member of the Appraisal Institute based in Palm Beach Gardens, Fla., indicates that with some homes, technology systems are expected. "A multiroom audio system is going to be standard in a million dollar house in this area, but in a $400,000 home, it is not going to be there," he says. The value of the technology systems in the higher end home won't necessarily help it sell for more, according to Andersen.

"If there were two similar homes located next to each other and one had an alarm system and the other didn't, there wouldn't be any difference in the appraised value based on the alarm system alone," says Andersen.

Adding Intangible Value

While the technology may not add dollar value, it may help with the "curb appeal" that helps homes sell faster. "Technology can set a home apart from the one next door," says Walker.

Tricia Parks, president of Dallas-based home industry research company Parks Associates, agrees. "If a new home has structured wiring, it is likely to hold value well because it doesn't wear out," Parks says. Although it is hard to say just what that dollar value will be, selling a home with structured wiring may offer other benefits, according to Parks. "It may encourage sales over a similar house, or it may increase the speed of a sale," she says.

Parks says that because someone selling an existing home is frequently competing with new homes, systems installed in an existing home provide an equalizer effect. "As opposed to providing a dollar value, technology systems can increase interest for resale," says Parks.

"No one is going to offer me a dime for the 1990 RCA home theater system I have in my house. They would just rip it out," says Parks. "But a professional home theater system no more than seven or eight years old should retain some value. How much value is hard to say because the types of systems are so varied in cost and quality."

According to Parks' 2004 survey of homebuilders, security systems are most likely to influence the sale of a home. Parks says security systems hold value in part because their average useful life is 17 years.

Like security, computer networking and multiroom audio systems are more like infrastructure than a device that can be unplugged and exchanged for a newer model.

It is important to look at the technology installed in new homes when considering resale value of technology, because new homes become the base line for expectations. And according to Parks, technology is more important in new homes than before. "According to our survey, kitchens are important to 94 percent of new-home buyers, and for the first time, computer networking is important to more than 50 percent," she says.

Michael Bordenaro is a Chicago-based freelance writer.

Does energy technology help resale value?

With the increased use of advanced technology, energy efficient home operation is not just about thicker insulation, better windows and sealed doors. Demand response systems with critical feedback loops for monitoring gas and electric use, electronically commutated motors for saving electricity in varying air-flow sealed furnaces, boilers with modulated firing rates and other technologically advanced systems are helping reduce the cost of operating a home.

While the EPA's Energy Star program provides documentation on expected saving for home appliances, little documentation exists on the resale value of whole-house energy enhancements. However, there is a growing awareness of the general value of energy-saving technology.

Greg Thomas, president of Performance Systems Development in Ithaca, N.Y., provides whole-house energy retrofits and other services that are used to add value to a home's resale. "People use our reports on energy saving when selling their house, and we have created energy savings summary sheets that real estate agents use to make the house more attractive," he says.

The exact value of the energy saving technology in homes has not been fully quantified. The Environmental Protection Agency sponsored a review of multiple energy saving studies. The report, "The Value of Energy Efficiency in Housing," concluded, " ... the empirical studies suggest that energy efficiency improvements in housing are capitalized to some degree. However, ... it is impossible to draw reliable conclusions about the magnitude of that capitalization in typical market environments."

Ever aware of the competition between the builder and existing homes sales, Thomas says, "A number of builders are guaranteeing energy performance in new homes, so we are trying to establish a system so we can do that for existing homes. We want to communicate the value of the work done and how it will transfer through the resale process in a predictable manner." Using duct blasters, infrared sensors, blower door tests and other systems, Thomas is working to quantify the value energy technology adds to a home's resale value.

Companies such as Jim Curtis' EEMs, Inc. in Mountain View, Calif., are working to provide mortgages that reflect benefits of energy efficiency, including technologically advanced thermostats, heat exchange systems and other systems. Curtis helps home buyers obtain FHA or VA Energy Efficient Mortgages (EEM) that allow the borrower to add 100 percent of the cost of eligible energy improvements to a home loan.

As it becomes more popular for lending institutions to acknowledge the value of energy saving, it will be easier to put a specific dollar amount on the value advanced energy technology adds to a home's resale.