AI Real Estate Listings Raise Concerns Over Misleading Photos

AI real estate listings are raising consumer concerns as artificial intelligence is increasingly used to make properties look different from how they appear in real life. California and several other states are responding with regulations requiring disclosures when certain listing photos are digitally altered.

Ji-yoon Park, 25, recently scheduled an in-person tour of a one-bedroom apartment in West Hollywood after seeing photos of the property on Zillow. In the listing, the unit appeared to have white marble floors and an interior filled with natural light. Park assumed the apartment was on a relatively high floor with plenty of sunlight.

But when she arrived, the apartment looked significantly different.

The floors were dark tile rather than white marble, and the interior felt much smaller than it appeared in the photos. The ceilings also seemed lower, and there was so little natural light that the lights had to be turned on.

“I thought AI had only been used to add furniture,” Park said. “I didn’t realize it could make the lighting, size and even the interior look different. I went there with certain expectations because I trusted the photos, but I felt like I had been scammed.”

AI-powered editing of real estate photos is becoming increasingly sophisticated.

According to a Sept. 8 report by The New York Times, the real estate industry has long used “virtual staging,” including Photoshop and other tools to add furniture to photos of empty homes. More recently, however, AI has been used to create fireplaces or views that do not actually exist, change the color of lawns and even add sunset scenery. Such images have appeared in listings on real estate platforms including Zillow and StreetEasy.

 

Zillow said in July that listings must clearly disclose when AI has been used to materially alter property photos. The company noted that AI-generated images can now be produced faster, are increasingly difficult to identify and are becoming more widely used.

States Move to Regulate AI Real Estate Listings

As AI real estate listings become more common, states are beginning to impose new disclosure requirements.

Since January, California has required real estate agents and brokers who use digitally altered images in property sale advertisements to prominently disclose that the photos have been modified. Online advertisements must also include the original photo or provide a link or QR code allowing consumers to view it.

The current law, however, applies to property sales and leases lasting longer than one year. Separate legislation is being pursued to expand the rules to more typical rental listings.

Routine edits that do not change the actual condition of a property — including adjustments to lighting and color, cropping, straightening and sharpening — are exempt from the disclosure requirement. Consumers therefore still need to exercise caution when evaluating listing photos.

Wisconsin has passed a similar law that will take effect in 2027, while related legislation is being considered in New York and New Jersey.

Real estate experts advise prospective buyers and renters not to rely solely on listing photos. Instead, consumers should compare images with property descriptions, floor plans, room dimensions and 3D tours.

If the information does not match what appears in the photos, consumers should ask the agent for the original, unedited images or request a live video tour. Experts also advise against signing a contract or sending a deposit before personally verifying the condition of the property.