Realtor Lockboxes Explained: A Summary of Lockbox Options and Alternatives for Real Estate Agents
Real estate professionals today have a plethora of high tech options out there to enhance their business, but rarely do we fully consider the value of the lockbox – the sole piece of equipment responsible for allowing agents to show the homes that we sell everyday. The lockbox itself has evolved over time, and today agents find themselves comparing the value from a standard combination lockbox to that of a more high-tech electronic lockbox. Real estate agents today are pressed from all sides for fees, dues, and expenditures that are unavoidable costs of doing business, so when it comes to making a decision between a combination lockbox that’s just a few bucks versus a high-tech electronic lockbox that is substantially more expensive, does the increase in cost justify the value? Also, what are all the options out there for electronic lockboxes? This article highlights the findings of current industry options available.
Having the ability to show a home without the sellers there to watch your every move was a move in the right direction for the real estate industry. Agents know very well the situation where a seller will remain in a home during a showing and “pretend” like they are minding their own business while the buyers tip-toe through the home trying not to impose while attempting to get a sense of what the home was like.
This is a wild departure from the typical showing when the sellers aren’t there; clients love to snoop around in order to get a good sense of the home. With the sellers not there, the buyers get a good opportunity to get a true sense of how that particular home would feel and if they can see themselves living there. Put simply, it allows for a better, more convenient showing experience.
From this dilemma the lockbox was invented. A device securing the key for entry by licensed real estate agents to show their prospective buyers, and it allowed sellers (or their agents) the opportunity to have the home shown without the need of their presence. It saved time, and allowed for a better showing experience. Truly, it was a win-win.
However, early lockboxes were simply a combination lockbox. They are certainly inexpensive, but an obvious downside was the lack of security for the home in question once the lockbox code was known. Sellers would rely on the professional ethics of real estate agents to keep the code confidential, but sometimes the code would slip into hands of non-agents. Less frequently, the code would be found by people with malicious intent.
With the obvious shortfall of relying on the honor system to keep lockbox codes confidential, it offered the opportunity for a better solution that would allow for accountability along with the ability to show a home without the seller being present. As a result, it did not take long for “smart” lockboxes using electronic technology to come into existence, thus revolutionizing the process of showing a home. Before a seller and their agent wouldn’t really know who was showing the property other than the confirmed appointments that were made. Flash forward to today, and you have the ability to know exactly who and exactly when someone shows a property through the use of an electronic lockbox. With these smart electronic lockboxes, only an agent or other authorized party can access the lockbox itself, further emboldening the assurance to a seller that only licensed agents and properly authorized individuals are showing or entering their home.
Today there are 2 main companies that provide these smart electronic lockboxes to real estate agency associations. They are Supra key and Sentrilock. Together they comprise the majority of the lockbox industry market; nobody else comes close.
Supra (or SupraKey) is owned by general electric and provides lockbox solutions to all sorts of niche industries, real estate lockboxes being one of them. Bill Love, national account manager for Supra, says that out of a given state or region in the country, Supra, on average, maintains an 80% market share. Supra has sold several million lockboxes throughout the years to real estate agents, and currently Love estimates that there are 1.5 million+ Supra lockboxes currently in use by about 750,000 real estate agents throughout the country.
The supra key itself features a cylindrical design up to the “shackle” (the loop part of the lockbox that will noose around something and keep it in its place securely) where the shackle fits in seamlessly. Its simplistic design is pleasing to the eye, and to activate the lockbox, an agent has a “digital key” that’s about the size of a small flip phone and has a number pad and screen on it. The agent sets the key to open a box and points it in the direction of an infrared sensor on the box itself. When the lockbox recognizes that it being accessed by the remote digital key, it will release to allow access and the bottom of the lockbox will fall out when it’s pushed by the agent, and voilà, the key to the home is available for the agent to take and open the door for the showing.
Love says that Supra has plans for upgrades to the current model lockbox that will include the ability for wireless Bluetooth access and syncing. Also, rather than having the digital key, if the agent has a smartphone, Supra offers an app for access with the phone instead, which makes it easier and more convenient, for a monthly fee. Love claims that the key difference with a Supra Lockbox is that “it keeps intelligence in the hands of the user.” Rather than having to rely on extra equipment or other trades people, the user has the control. Supra has had the current model for several years now with incremental software updates along the way. If an agent wants to buy a new Supra lockbox, it costs around $90, but the actual price that an agent will pay is determined by the association that they belong to.
Sentrilock is the other major player in the real estate lockbox industry. Sentrilock, which is based out of Indiana and is partially owned by the National Association of Realtors has been around for less than a decade and currently services about 250 of the 1000+ Realtor associations throughout the country and Canada as well. These associations comprise about 250,000 agents and approximately 500,000 lockboxes in current use. Sentrilock has 2 main models that are currently used; one is a silver lockbox that resembles a cell phone from the late 1980’s, bulky and heavy and somewhat longer in size than the supra lockbox. It has a key pad directly on the front of the lockbox itself, and holds the key within a drop-down door that pops open when accessed.
The other lockbox they offer is a smaller, more compact blue lockbox that is more cube-ish in shape but with the similar functionality features. The main difference between the silver and blue lockbox is that the blue lockbox allows for more space within the lockbox itself (which is important for people trying to sell a condo and who need to include an “access fob” in addition to the key to the front door of the unit itself – there just isn’t enough room for multiple keys or when including the access fob with Sentrilocks’ silver lockbox). Sentrilock sells their lockboxes for about $125 a piece, but this also depends on where you are getting it from, as the actual retail price is determined by the local real estate association that sells the boxes.
Both lockbox companies offer substantial warranties on the product themselves. They also have a support team that is almost always available in the event there is difficulty in accessing a lockbox, or for troubleshooting purposes. Both companies offer a comprehensive online tool that can provide the analytics from the showings and use of a specific lockbox which agents can use to share with their clients.
Some of the main differences between these two are how the lockbox itself is accessed. Sentrilock doesn’t need an extra piece of equipment to open a box. Rather, they utilize a “Smart-Card” which is essentially a credit-card that fits into the lockbox and has a chip inside it that shares your information with the lockbox you are accessing. This card is all you need to access the lockbox, whereas Supra requires the digital key, although they have addressed this by means of offering the smart-phone app so an agent can use their phone in place of the digital key. Both systems require updating; in other words, the smart card for the sentrilock system requires you to stick your card in a “card reader” that you get when you buy your smart-card that hooks into your computer. Every few days (the exact amount of days is determined by your local Realtor association) you must update the card through the card reader, which will allow you to show property, and at the same time uploads the information of the places you have shown to the Sentrilock system, which in turn is then able to be seen by the agents who owned the lockboxes of the places that you accessed. In a pinch you can update your card over the phone, but you can only do this once or twice.
On the other hand, supra keys update wirelessly. They didn’t always do this, where you were required to keep your “digital key” docked on a charging station that was hooked up to a phone line. You had to do this every day and that’s how the system would both update your card as well as share your showing information to the system. The wireless updating feature has been in place for a year or two now, and takes the headache out of the equation of having you update your key each and every day.
The back end system for Sentrilock allows an agent to create specific access codes for one-time access of a specific lockbox. This makes it really convenient for a contractor, appraiser, termite inspector, etc. to be able to access a property with a code, but only one time because that code will expire after the day the code was intended to be used. This is a great feature that Supra doesn’t have an answer to.
Although there are benefits to both systems, any agent can’t simply choose which lockbox system they want to use – this is decided, agreed to and contractually obligated between either Sentrilock or Supra and an agent’s local real estate association. These associations, once they have agreed on a system to use can then “tweak” the system to their discretion and preference. Things like the cost of a lockbox, whether the lockbox is leased or sold to agents, the amount of times an agent can renew their key by phone, the amount of days that can elapse before an update of an access key is required, these and more options can be tweaked and most real estate professionals are unaware that other options or preferences exist.
When comparing the benefits over your standard combination lockbox, an agent must be able to justify the added cost of a smart-electronic lockbox by the value it provides. It’s easy to do so, especially when taking the seller’s best interests at heart, as the smart lockbox will ensure accountability and a better safety and security measure for the showing process and for the home itself. Its analytics information and the ability to control who can actually gain access to the home are tantamount to successfully being able to gauge the interest in a home by means of how many people are interested in seeing it as well as being able to rest assure the seller that a home is being shown but in the most secure manner possible.
During this most recent downturn in the economy, most real estate markets throughout the country were inundated (and some still are) with foreclosure property. Certain real estate brokerages that specialized in this type of distressed property had the best years of production on record for the 2008 and 2009 years. All of these properties that needed to be shown and sold needed lockboxes, but the value provided by a smart lockbox through Sentrilock or Supra didn’t justify the cost to acquire, as distressed-property brokerages had inventories of 50, 100, 200 or 300 properties at a given time. The smart lockboxes were too expensive, especially when taking into account that the home in question was owned by the bank, it was vacant and the analytics of showings didn’t matter when a given foreclosure property is selling in no time at all with multiple offers. If an agent is carrying even 50 listings with a smart lockbox, it entails $5000 worth of lockboxes needed on all the properties he/she has for sale. At this point, a less expensive combination lockbox from Lowes for $7 looks way better and the total outlay for the lockboxes is substantially less. It’s a combination of utility value and overall price paid from the standpoint of the real estate professional, so it begs the question, why are the smart lockboxes so expensive?
Put simply, the market will bear the current price point of both the Supra and Sentrilock lockboxes because the value they provide are well worth the cost. That being said, certain companies have come into existence that are poised to take advantage of the amount of agents that want to sell their used lockboxes as well as the agents out there who don’t want to pay retail for the lockbox(es) they need for their business. Blake Nolan, co-owner of San Diego based LockboxSwap has created a website where a secondary market has been created and regulated for both the Sentrilock and Supra lockbox systems. Nolan says his company can help agents buy or sell their lockboxes and in the process save time and money. “Right now there is no real place online that offers what we offer” Nolan Says. He continues that “if you call into (any association) and ask about used lockboxes, or where to sell your own lockboxes, they say to go try craigslist or Ebay. We created LockboxSwap to address this vast and untapped market opportunity.”
Nolan’s’ LockboxSwap company plans to unveil the business this summer, and preliminary beta-test users have offered rave reviews.
In the world of Realtor lockboxes, smart-lockboxes are preferred because the overall value inherent in being able to secure a home, controlling the use of entry and having analytical accountability far outweighs the alternative of your standard combination lockbox (or no lockbox at all) Although the 2 main players in the Realtor lockbox arena have 2 excellent products, both fall short of being 100% perfect. They both do some things quite well and have the capabilities that the other does not. It would be great to be able to merge both products and concepts together, but since that is not possible, it’s up to each individual Realtor association to interview and determine which company is a better “fit” for them. At the end of the day, the 2 companies and respective products, although imperfect, represent competition between one another which keeps productivity and innovation high while keeping prices in check. Companies like that of LockboxSwap help to do this further by inventing and establishing the precedent for an industry that hereto has yet to exist, but has the ability to offer a cost-efficient alternative to Realtor professionals when it comes to their lockbox needs.
No matter what, it’s obvious the industry is moving in the right direction; we are witnessing technological advancements that help to serve Realtor professionals do their job better and more efficiently, and it is interesting to see what will be the norm in the near future as well as the long term. For now, Realtor professionals should be confident in knowing that while it’s great where we stand today, the future is only getting brighter.