- AI brings real estate staging to the palm of your hand.
- Some agents say AI-enhanced listings are misleading prospective buyers.
- California passed a law in January 2026 requiring disclosure with digitally enhanced listing photos.
When Realtor Sonia Rodriguez arrived to scope out a four-bedroom, two-bathroom condo in Annandale, Virginia, for her clients, she opened the door expecting to see a clean, well-lit, move-in-ready apartment.
Instead, she was greeted to a space that could generously be described as lived-in, with marks on the walls, pots on the stovetop, and a cat staring at her from atop a cluttered dresser.
The contrast between the listing's photos, which featured bright, clean rooms and modern furniture, and the home's outdated decorations and dirty floors came as a shock.
"That was the first time it's been that drastic of a difference," Rodriguez told Business Insider.
It was a classic case of bait-and-switch — and a quick pass.
"For this one, it was a no," she said. "My clients were looking for something that required less work."
Just as showing up for a date with someone whose profile photos don't match their appearance can be frustrating, so, too, can arriving at a house that looks nothing like its listing. Sellers usually aim to spruce up their properties to make them look as appealing as possible — tidying up, correcting a bad paint job, and sometimes even renting furniture to stage it. But now that those quick fixes can easily be done digitally with the advent of AI, the line between helping someone imagine a home's potential and deceiving them before they open the door is blurred.
On dates, it's called catfishing. With homes, let's call it "housefishing."
Jake Gordon, a Realtor based in Long Beach, California, recalled bringing a client to a home only to discover a major eyesore: power lines on the property that did not appear in the online listing.
"It wasted my time, my client's time, and it just felt like a bait and switch," Gordon told Business Insider.
"Many of my clients have very time-consuming jobs where going out and seeing properties is not easy for them," he added. "If they have kids, if they work a lot, and then go to a home that isn't what it looks like in the photos, it can be frustrating."
Both Gordon and Rodriguez said they frequently encounter homes that differ significantly from their AI-enhanced listing photos, though the degree of difference varies. On social media, particularly egregious AI-enhanced listings have gone viral, prompting consumers to complain that the technology is enabling deceptive advertising. It's become a big enough issue that California passed a law in January 2026 limiting the use of AI in real estate listings. Now, at least in one state, using what some agents see as a helpful and empowering tool without disclosure is illegal.
The fight against AI-enhanced listings has begun
California Assembly Bill No. 723, which went into effect January 1, states that any digitally altered image used in ads or promotional material must include a disclosure. It also states that if digitally altered photos are posted online, they must also include the unaltered original photo.
Gordon applauded his state for cracking down.
"It's all about transparency, so I do like it," he said, though he noted that enforcing the law may still be difficult. "For agents, it may add a new compliance layer. So the challenge will be defining the line between normal photo enhancement and altering the reality of a property."
California attorney and real estate broker Alan Zall told Business Insider that the law is a start, but it's not a perfect solution. "It's hard to legislate it because the question is, was the intent of the person that did this to deceive, or did they really not understand the intricacies of AI because it's relatively new?"
Rodriguez, the Virginia Realtor, estimated that 30% to 40% of the homes she tours don't look exactly like their photos. Though her state doesn't require agents to disclose digitally altered photos in listings, she noted that Realtors — meaning real estate agents who are members of the National Association of Realtors — are required by a code of ethics to fairly represent their properties. Still, a code of ethics is not a law, and not every real estate agent is a Realtor, so those ethics don't technically apply to everyone.
It's still very much the Wild West for AI in real estate.
How AI crept into agents' workflow
Melody Storey, a real estate agent in Oklahoma, said she now uses AI for most of her virtual staging. She was introduced to the tool by her 22-year-old son, who suggested she test out AI to envision what one of her rental properties could look like after major renovations.
"I tried it, it came up with some ideas, and I loved it," Storey told Business Insider.
Storey, 53, has seen the industry change in the two decades since she got her start as a real estate agent. Before the advent of popular online listing services like Realtor and Zillow enabled prospective homebuyers to scroll through seemingly endless listings with dozens of photos each, listings were placed in newspapers, where only a handful of photos would fit on a page.
The jump from print ads to online listings meant agents like Storey had to adapt. She went from borrowing the sole office camera to take photos of a property, to hiring a photographer for hundreds of dollars, to doing the photography herself with her phone. Now that the power of AI is at her fingertips, the same home-staging tricks Storey used to hire someone to do the past can be done in seconds.
"I have used virtual staging in the past that was done with my photographer, but I don't have to do that anymore — I can just tell AI what I want," she said.
That's not an exaggeration. Sub Gautam, who owns a software agency and previously dabbled in Airbnb hosting in London as a side gig, created an AI tool called PropertyPixel to streamline the photo-enhancing process.
"I took some images of my messy apartment, and I messed it up even further, just to test the boundaries of it," Gautam, 31, told Business Insider.
With PropertyPixel, Gautam can declutter his kitchen and pick clothes off the floor without actually having to do any chores. He said that the more he uses it, the better it gets, but admits that AI is not yet the perfect tool to fix up a property.
"AI has a randomness to it," he said. "You have to be careful."
For many real estate professionals, the line is clear: If you're fixing defects online before fixing them in person, that's a problem.
Ashley Marks, a Northern Virginia-based photographer, now offers AI enhancements as one of her services. But she always cautions agents against going too far.
"I've had some agents ask me to go in and get rid of a stain on the carpet or fix a hole in the wall," Marks said. "And I always say to them, I can do it, but if it's going to look like that when you're showing the property, you can get in trouble for doing that. So I wouldn't recommend it."
Even Gautam, who profits from an AI tool, thinks you can go too far.
"It's OK for the AI to pick up a shirt from the bed and toys from the floor," he said. "It's not OK for an AI to put back a ripped wallpaper."
