New York Department of State Issues New Trend Alert Warning Homebuyers of A.I. Generated Home Listings
Significant Rise in A.I. Images Being Used to Sell Homes Can Lead to Deceptive Advertising
Secretary of State Walter T. Mosley said, “These automated technology tools may produce misleading or exaggerated representation of properties”
The New York Department of State today issued a warning to homebuyers and real estate professionals about a significant rise in artificially generated pictures on real estate listings. As the real estate market continues to evolve, this new trend is being used to enhance the marketing of a property; however, it also raises important concerns about accuracy, authenticity and the potential for false advertising.
“While A.I. can help homebuyers imagine what a potential home can look like, these automated technology tools may produce misleading or exaggerated representation of properties," said Secretary of State Walter T. Mosley. "I urge real estate agents to be mindful when listing and consumers to be vigilant when searching for their dream home.”
The Department of State’s Division of Licensing has rules in place to protect the public from licensed professionals engaged in deceptive advertising practices. Dishonest and misleading advertisements are prohibited and could subject the real estate broker or salesperson to disciplinary action (Real Property Law § 441-c). All advertisements must include an honest and accurate depiction of the property being sold or leased (19 NYCRR § 175.25(c)(9)).
In addition to the potential for disciplinary action, General Business Law §§349, 350 and 350-a also prohibit deceptive acts and false advertising, and could subject any business or person engaged in the misleading advertising to substantial monetary penalties.
Buyers who feel they have encountered misleading information should report it to the New York State Department of State for further investigation.
In addition to the substantial legal risks, real estate agents using A.I. images may negatively impact their bottom line by using A.I to enhance their listings. A recent study from the International Journal of Information Management, found that consumers distrust A.I.-generated images and perceive them as less authentic, less professional and misleading, which negatively affects consumer trust and purchase intentions, particularly for “high involvement decisions” like buying a home.
For prospective homebuyers, the Division of Consumer Protection offers these tips to protect themselves from being misled by deceptive advertising practices:
Research and look for credible resources and referrals. During the homebuying process, buyers may work with lenders, real estate agents, home inspectors and other individuals. It’s important to do some initial research to get started on the right path.
Take your time assessing all the people you will work with and depend on to guide you through this important milestone.
Ask friends and family for recommendations of professionals they know and trust.
Check with your local Better Business Bureau to see if any complaints have been reported.
Verify the identity of any Real Estate Professional. Confirm that the real estate professional you’re working with is licensed in New York by following these steps:
Visit the New York State Department of State Public License Search Database
Conduct an independent online search and check the phone number associated with their real estate license address. Call the number to verify.
Request to see a copy of their Department of State-issued photo real estate license.
Look for signs of AI-Generated or Manipulated Photos or Videos. AI-generated images often exhibit subtle anomalies. Look for subtle defects or unrealistic images and videos.
Check if there are any distorted or inconsistent details. For example, watermarks, blurry backgrounds, or inconsistent window views.
Beware of images that look too perfect, misrepresenting the condition of the property. Real homes always have small imperfections.
Never send money, provide an initial “holding deposit” or share personal information until you have met the agent and seen the property in person. Giving money directly to a seller or agent before verifying is risky, and the money paid may be difficult or impossible to recover.
For more tips, check out our guide, which features important scam prevention tips for first-time homebuyers.
About the New York State Division of Consumer Protection
Follow the New York Department of State on Facebook, X and Instagram and check in every Tuesday for more practical tips that educate and empower New York consumers on a variety of topics. The New York State Division of Consumer Protection provides voluntary mediation between a consumer and a business when a consumer has been unsuccessful at reaching a resolution on their own. The Consumer Assistance Helpline 1-800-697-1220 is available Monday to Friday from 8:30am to 4:30pm, excluding State Holidays, and consumer complaints can be filed at any time at www.dos.ny.gov/consumerprotection. The Division can also be reached via X at @NYSConsumer or Facebook.