AI images boost real estate marketing but raise buyer concerns: Report

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00:00The real estate industry is undergoing a digital transformation.

00:04One of the latest tools real estate agents are using to market properties is AI-generated images.

00:12From virtual staging to complete property visualizations,

00:16artificial intelligence is helping agents put together more attractive listings

00:20more efficiently than ever before. However, some buyers have started to question the true

00:25condition of several properties after realizing that AI-generated listing photos can conceal

00:31the worn-down, aging nature of the homes, Wired reports. The magazine spoke to a woman named

00:38Elizabeth from Michigan. She said as she was looking at homes on the market in her area,

00:43she began scrolling through listing photos, and she noticed a yellowish hue to some of them.

00:48She described one image that had a stairway leading to nowhere, saying it looked cartoonified.

00:53What can initially appear to be freshly renovated interiors and pristine exteriors are, in reality,

01:00often chipped paint, outdated fixtures, and neglected maintenance clearly masked by digital

01:06touch-ups, Wired reports. As more potential buyers visit these properties in person,

01:11the contrast between the AI-enhanced images and the actual state of the homes has sparked growing

01:17distrust, prompting concerns about transparency and authenticity in real estate marketing.

01:22According to the National Association of Realtors, licensed real estate agents are not allowed to

01:28misrepresent a property. However, they can use AI-generated images to improve a client's experience

01:35and better serve their needs. A buyer's agent can use generative AI to help clients envision

01:41possibilities. However, they must be truthful and make sure clients understand what's real and

01:47what's hypothetical. According to Article 2 of the Code of Ethics and Standards of Practice of the National

01:52Association of Realtors, licensed real estate agents must avoid exaggerating, misrepresenting,

01:59and concealing of pertinent facts related to a property or the transaction. Now, if a listing agent

02:05uses AI to edit property photos, like adding furniture, fixing the lawn, or changing paint colors,

02:11they must clearly state that the photos have been digitally altered. If a listing agent posts AI-generated

02:18photos on the multiple listing service without disclosing that they've been edited, the agent's

02:24actions could mislead buyers, which could violate the realtor code of ethics. For Straight Arrow News,

02:29I'm Lauren Keenan. If you want more on this story, download the Straight Arrow News app or visit san.com.