NY Department of State Warns Homebuyers of Deceptive A.I. Generated Real Estate Listings

The New York State Department of State (DOS) has issued a warning to prospective homebuyers and real estate professionals across the state about the growing use of artificially generated images in property listings, cautioning that this practice can result in misleading and deceptive advertising.

Secretary of State Walter T. Mosley announced the “New Trend Alert,” stating that while AI tools can help homebuyers visualize potential homes, these automated technologies may also produce misleading or exaggerated representations of properties. He urged real estate agents to comply with existing regulations and advised consumers to remain vigilant when searching for a home.

The DOS reported a notable increase in the use of AI to “enhance the marketing” of properties. Although intended to make listings more appealing, this trend raises serious concerns about the accuracy and authenticity of images, potentially constituting false advertising.

The Division of Licensing emphasized that current regulations strictly prohibit dishonest or misleading advertisements. Violations of Real Property Law § 441-c and 19 NYCRR § 175.25(c)(9)—which require an honest and accurate depiction of properties—could subject licensed real estate brokers and salespersons to disciplinary action.

Misleading advertisements may also violate the General Business Law (§§ 349, 350, and 350-a), resulting in significant financial penalties for involved individuals or businesses. The Department further warned that the use of AI-generated images poses a business risk to agents, as research indicates consumers tend to distrust such images, viewing them as less authentic and less professional, which can undermine consumer confidence and purchase intentions.

To help consumers avoid being misled, the Division of Consumer Protection shared key tips for homebuyers. It advised buyers to rely on credible resources by vetting lenders, agents, and inspectors, seeking recommendations, and checking with the Better Business Bureau.

The DOS also urged consumers to verify that real estate professionals are licensed in New York by using the New York State Department of State Public License Search Database or by requesting to see their Department-issued photo license.

Buyers are further encouraged to watch for potential AI-related inconsistencies in listings. Images that appear “too perfect” or show subtle defects, inconsistent details, or blurry backgrounds may have been digitally altered.

The Department stressed the importance of safety, advising buyers to never send money upfront, provide a “holding deposit,” or share personal information until they have met the agent and viewed the property in person. Anyone who suspects they have encountered misleading information is urged to report it directly to the New York State Department of State for investigation.