Where’s the Line with AI in Real Estate?

     Regardless of whether you embrace artificial intelligence (AI) or shun it, it’s wise to be aware of what it can do and to understand its legal (and ethical) uses.  

Are the Pictures Real?

     When selling real estate, pictures that highlight your property’s best features are essential. Ever since photography has existed, photographers have enhanced photos by adjusting exposure (brightness), cropping out unnecessary elements at the edges of a picture, and positioning the subject to downplay flaws.

     With the advent of AI, you can alter pictures way beyond strategic cropping; you can now remove immovable objects. Don’t like that light pole right in front of the house? Remove it. Don’t like the peeling paint above the garage door? Fix it. Plan to replace the shingle roof with a metal roof, let AI edit the picture to show the house with its new roof.

     In photography and so many other AI applications, the line between appropriate use and inappropriate use is transparency. If the changes wrought by AI are deceptive, they shouldn’t be allowed. If you want to compare what the property could look like with a new roof, show the existing structure and then clearly state that the picture with the AI-generated roof is intended to provide an example of what the house could look like once the roof is replaced.

Who Am I Talking To?

     Another common use of AI is customer service through chatbots. Again, transparency is key. People need to know when they are talking to a computer rather than a human being. And legally, chatbots are not allowed to do work that requires a license. In real estate, this means activities such as quoting interest rates, pricing, and availability, or negotiating a contract.

     On a related note, when you talk to someone on the phone or online, you can be recorded or a transcript can be taken with AI support. Ethically, everyone on a call should be informed when this is happening, but that doesn’t always happen.

Is This Description Accurate?

     Another use of AI is to create property descriptions. Once you’ve been a REALTOR for a while, it can feel nearly impossible to describe each new listing in a way that differentiates it from the house next door. AI can provide you with a little burst of creativity.

     However, depending on AI to compile a full description, including bedrooms, bathrooms, square footage and other key features is risky. AI can only pull from information in the public domain online, and sometimes that information conflicts. Also, the most up-to-date data may not even exist online. When home improvements are done without a permit, there’s no public record for AI to find.

     In addition, AI can “hallucinate,” the term used when AI simply creates false information. Any time AI is used to create a description, humans should verify its accuracy.

What Are the Legal Pitfalls of AI?

     People are turning to AI for all sorts of support. If you ask AI for legal advice on your real estate transaction, hallucinations can be especially costly. Be sure to have the information verified by an actual lawyer. A better use of AI is to ask for help formulating pertinent questions to discuss with your lawyer or other licensed professional.

     AI can also be legally problematic if it is asked to perform a task without specific and comprehensive criteria. For example, if you ask AI to screen potential renters, it could give preferential treatment to one group or another. People’s biases have seeped into information online, which is where AI pulls from.

Beware Deep Fakes

     One of the scariest threats from AI is its ability to mimic people’s voices and visual likenesses. I recently saw a video where a famous person was digitally inserted to make it seem like they personally knew the person making the video. It was uncanny.

     Scams including wire fraud can cost people untold amounts of money. If you get a call from someone you know with a last-minute change about where funds should be wired, let them know you need to call them right back. Then, use the number you always use (not one provided by them) to call and confirm the change. This is yet another reason I work with local vendors. I like that I can drive ten minutes to their office and look them in the eye before handing over my money.

     If you have questions about property management or real estate, please contact me at [email protected] or call (707) 462-4000. If you have an idea for a future column, share it with me and if I use it, I’ll send you a $25 gift certificate to Schat’s Bakery.

     Dick Selzer is a real estate broker who has been in the business for more than 50 years. The opinions expressed here are his and do not necessarily represent his affiliated organizations.