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| Buying or Selling with AI? |
AI, as is generally known, seems to be discussed in the media practically everyday. The capacity and use is being expanded on a weekly and/or daily basis. The real estate industry and Realtor organizations are fully aware of the presence and use of AI, including by customers of real estate agents looking to make offers and negotiate transactions. So here are some of the things to consider about AI.
In response, broker office policies are being developed by brokerages, and on a broader scale, the California Department of Justice has published its legal advisory on the application of California laws to AI. This advisory includes discussion of California's laws on data privacy, unfair competition, false advertising, competition laws, civil rights, and election misinformation prevention. And there are recent laws as of January 1, 2025, concerning disclosure requirements for businesses, unauthorized use of likeness, using AI in campaign and election materials, exploitative uses of AI, and AI tools in healthcare settings.
Back to the real estate business-- besides advice from the California DOJ, real estate agents are now bound by AB 723, effective January 1, 2026, which imposes new obligations on real estate licensees with respect to the use of digitally altered images in advertisements and promotional materials for the sale of real property. What does this mean? that if a property listing shows photos that have been digitally altered to promote the sale of that property, then the "before" or "actual" view must also be presented with the "improved" altered photos. In other words, there must be a true representation of the property. Very minor alterations, such as a color enhancement, are not included in this requirement, but a viewer must be able to see the current status of condition.
Brokers and agents are currently reporting that customers are asking the AI sites what a good offer price is, how to negotiate some terms, what repairs to ask for when the physical inspection report is uploaded for AI review, etc. Many agents are using AI in their work, including myself, there are many ways it can be very helpful, but please note that AI can make mistakes, and that is noted in the summaries/responses that I've received back to a request or question.
Things to keep in mind when using AI for real estate: a) it hasn't been inside the houses in the area for comp purposes; b) at this moment in time, it doesn't know all real estate law, customs or broker practices, either statewide or locally; c) it doesn't set up appointments and show the customer the property; d) it may not do a complete job on reviewing seller disclosures or other documents nor know what may have been omitted/delayed/is incomplete; e) it may miss a major issue, or one that becomes a major issue for the client, in any of its summaries (back to that disclosure about mistakes). The real estate agent, who is there to help the client, is the agent for the client per their contract with each other, and is not the agent of AI, which is an outside 3rd party to which it has no obligation.
In the meantime, AI tools are rapidly being added to the agent's toolbox to create ease and convenience in certain ways for getting documents prepared. But these tools are not just picked out of the sky, they have been vetted and reviewed by our professional organization to keep clients at the forefront. So prospective buyers should be aware that while AI is amazing, it's a tool, and one which can be used successfully by both you and your agent in the right ways. And now, I'm going to ask AI for a nice illustration for this post.
Julia Huntsman, REALTOR, Broker | http://www.abodes.realestate | 562-896-2609 | California Lic. #01188996
