AI-Altered Home Listings Are Getting Harder to Spot. States Are Moving to Regulate Them

Artificial intelligence can add a fireplace to a real estate listing photo, erase damaged flooring or make a room look larger in seconds. As those alterations become harder to detect, states are beginning to set new rules for how brokers, agents and sellers can use them.

California already requires real estate brokers and salespeople to disclose certain digitally altered images used to advertise homes for sale. Wisconsin has enacted a similar requirement that takes effect next year, while lawmakers in New York and New Jersey are considering additional restrictions on AI-generated and digitally manipulated listings.

The laws and proposals focus on edits that materially change how a property appears to a potential buyer or renter. Ordinary photo adjustments generally remain allowed. Changes to a home's condition, features, layout, or surroundings can trigger disclosure requirements and, in some cases, expose real estate professionals to disciplinary action.

The issue has grown as generative AI tools make sophisticated edits available within seconds. Listing photos can show greener landscaping, different flooring, cleaner walls or features that were never part of the property.

Zillow said in July that AI has made manipulated listing photos faster to produce, harder to detect and more widespread. The company said listing images should accurately represent a property and supports clear disclosure when AI materially changes what consumers see.

Assembly Bill 723, which took effect January 1, requires a broker or salesperson who uses a digitally altered image to advertise real property for sale to disclose the alteration and provide access to the original image.

The California law applies to virtual staging and other digital changes involving fixtures, furniture, appliances, flooring, walls, paint, landscaping, facades, floor plans, views through windows and neighboring properties.

Cropping, exposure, sharpening, white balance, and similar photographic adjustments remain outside the rule when they do not change how the property itself is represented.

California's Department of Real Estate has also warned licensees that they remain responsible for reviewing AI-generated material before using it in advertising. An agent cannot avoid responsibility for an inaccurate listing simply because an AI tool produced the error.

Real estate advertising was already subject to rules against false or misleading representations before generative AI made sophisticated photo manipulation widely available. The newer laws give regulators more specific standards for alterations that may be difficult for consumers to recognize.

New York lawmakers are considering legislation that would place materially misleading digital representations directly within the state's consumer protection and real estate licensing laws.

Senate Bill 9584 would cover photographs, videos and virtual tours that materially misrepresent a property's condition, features, dimensions or layout or interfere with a reasonable consumer's understanding of what is being offered.

The measure would require disclosure of materially altered or virtually staged images and labels on AI-generated or reconstructed virtual tours that do not depict a property as it currently exists. Undisclosed edits could not be used to add nonexistent features or conceal known defects.

Licensed brokers and salespeople could face suspension or revocation of a real estate license for violations. The state attorney general would also have enforcement authority.

New Jersey Assembly Bill 4728 would generally prohibit sellers, landlords, and their agents from using AI or other editing software to fundamentally alter photographs advertising homes for sale, rent or lease.

The proposal would allow digital staging that adds or removes furniture and other non-fixed items when the underlying image still reflects the property's current condition. Use of editing software would have to be disclosed, and prospective buyers or renters could request the original photographs.

The bill would also require listing photos to reflect the property's current state and generally be no more than five years old. Agents could face discipline from the New Jersey Real Estate Commission, while sellers could face civil penalties.

Wisconsin's statewide requirement takes effect January 1, 2027. Under Wisconsin Act 69, real estate licensees must disclose when technology, including AI, has been used to add, remove or change property features in a way that creates a false or misleading impression.

The state measures vary in scope, but each targets alterations that can give consumers a materially different impression of a property's condition or features. Depending on the state, violations can bring disclosure requirements, civil penalties, or disciplinary action against a real estate license.

For buyers and renters, increasingly realistic AI means the photograph that brought them to a property may no longer be reliable evidence of what they will find when they walk through the door.