Real estate agents have always known how to make a property look better. There’s almost an art to it: wide-angle lenses, flattering light, strategically placed furniture. The really pushy ones can even tweak the lighting of photos and use clever angles to hide blemishes. But AI is turbocharging things and taking it beyond what’s acceptable — way beyond.

Some agents are now using generative AI to edit or literally fabricate property features and this could be more widespread than we realized.

Unbelievable. As In, You Shouldn’t Believe It

A listing from the UK, first spotted by The Register, showed a £350,000 home ($470,000) that looked freshly renovated. It looked like a dream house. But the reality was a less-polished façade, a neighboring business stuck right up against the wall, and none of the floral landscaping that the AI had conjured from thin air.

A less keen eye could have easily missed the details. But if you were to look carefully through the 22 images of the listing (now removed), you’d find some pretty curious things. The real photos show a commercial property adjoining the premises. There is a hair and beauty salon whose roof is literally right next to the windows. The business is completely absent in the listing’s lead image.

Some of the inside photos show the actual property, others show it decorated with virtual furniture. But in the decoration process, the rooms themselves have become bigger and some of their structural elements have changed.

Scroll deeper into the listing and the digital distortions pile up. A radiator becomes an oven. An empty bedroom magically gains floor-to-ceiling wardrobes that don’t exist. A bathroom toilet switches walls entirely and sits behind a floor-length curtain that slices impossibly through its waste pipe.

It’s more than just a little pushy advertising or sneaky photos; it’s digital deception.

We Have No Idea How Common This Is

Developers have long used CGI to market off-plan apartments, dressing them in sleek, minimalist interiors. But those are clearly 3D renders. Generative AI is a different beast. Instead of staging with furniture, it can remodel entire spaces in seconds — with no physical renovation, no cost, and, crucially, no disclosure.

Unlike traditional photography tricks, AI can erase problems that matter to buyers with ease. If you can delete a neighbor and make the garden prettier, fixing up some cracked brickwork or other blemishes is a piece of cake.

Here’s the kicker: in many places, there’s no explicit law requiring agents to disclose AI alterations. Building surveyors are bound by professional regulations and carry liability insurance. If they get it wrong, they can be sued. Real estate agents? Not so much. Their primary duty is to close the deal. In most countries, deception and misrepresentation can be legally damning, but more often that not, AI falls in a firmly gray area. The technology is new and our laws haven’t adapted to it.

You may think that Roseberry Newhouse, the agency responsible for the AI modifications, is an exception. Well, back in November 2023 consultancy firm McKinsey & Company claimed that generative AI could “generate $110 billion to $180 billion or more in value” for the real estate industry. There’s a whole industry emerging. Startups like REimagineHome offer “virtual staging” in which you can add virtual furniture with AI and even showcase the room in different styles to cater to would-be buyers.

Social media users are also reporting instances where they visited houses that looked nothing like the images, as well as houses that have been clearly edited with AI, showing mangled numbers or things just levitating in open air.

Lying and hiding

There’s nothing wrong with showing how a room could look like with different furnishing styles, as long as the ad explicitly indicates that the image is synthetic and AI-edited. But hiding the disclosure in a bottom corner, and altering a house’s underlying structure is clearly misrepresentation.

Buying a home is one of the biggest financial commitments most people ever make. Misleading photos don’t just waste time — they warp perception, shift bidding behavior, and can push buyers toward properties they’d never consider if they saw the unvarnished truth. At the very least, they waste a lot of time and effort for everyone. Imagine putting down a deposit only to discover that the airy kitchen you fell in love with is actually half the size, or that your “quiet street” sits next to a noisy business stripped from the images. Sure, you might catch these things during a viewing — but not before you’ve spent money on travel, inspections, or legal fees. And in competitive markets, where buyers rush to make offers sight unseen, the risk skyrockets.

It’s not clear how this can be enforced to an acceptable standard. Banning AI-edited images is unlikely to work given how widespread the technology is, but clearly mentioning that AI has been used (and how it was used) to edit the photos seems like a good start.

For now, it’s yet another problem house buyers will have to deal with.