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Augmented Reality and AI Risks for Real Estate Brokers

New technologies such as Augmented Reality (AR) and Artificial Intelligence (AI) are transforming the real estate experience. From virtual tours to chatbots, these tools are adding value to brokers, licensees, buyers and sellers. With the introduction of any new tools comes some degree of risk. In this blog, we’ll explore those risks and also the opportunities that brokers can take advantage of to use AR and AI safely in your businesses.

Applications of AR and AI in the Real Estate Industry

One of the main areas that AR is making an impact is in the virtual tour space. Through this innovative technology, prospective buyers can view a property online in 3D. If it’s unfurnished, virtual staging can show it furnished, so the buyer can better visualize the rooms and where their belongings might go. AR even makes it possible, with 3D renderings of architectural plans, to virtually walk through a building that hasn’t been built yet. Prospects can virtually walk around a property and look at it from different angles. 

Augmented reality uses artificial intelligence and advanced imaging technologies, making the property viewing experience immersive and interactive for prospective buyers. The combination of AR and AI pushes the boundaries of traditional real estate. It offers new and innovative ways for brokers to engage clients, so they can find their ideal homes.

Additionally, many businesses, including some in the real estate industry, have been experimenting with AI tools such as ChatGPT, along with AI image creators to create content. AI-powered chatbots have also been popular, especially to provide customer service. 

But, brokers beware, there are some legal risks to consider when using these new technologies. 

Legal Risks

Three very common risks that can arise when using AR and AI in real estate are:


Sometimes systems (or people) can get things wrong. Imagine if you showed a prospect a property and the 3D rendering suggested the bedrooms were 10 x 12 feet when they are actually only 7 x 9. Or perhaps a buyer thinks they are buying a fully landscaped property, but the front landscaping was AI generated just to provide an idea of how good it could look. It is possible that AI algorithms could produce the wrong information as well — for example, data about comparable properties, last sale prices, or square footage information. 

If anything other than the facts has been presented when marketing a property, you could see your brokerage business facing legal action if buyers relied on incorrect information to make their purchase decision.

Real estate brokers and licensees have a duty to their clients to act in their best interests. If a client believes you haven’t acted in their best interests, you could be accused of negligence or breach of duty. This could occur even if you unintentionally and unknowingly make a mistake because you’ve used AR and AI and trusted the outputs without checking. 

See How Real Estate Professionals Can Get Mixed Up in Negligence Claims.

If brokers rely on content created from AI, there is a chance you may be infringing the copyright of other creators or businesses. AI tools such as ChatGPT scrape the Internet for information, so they can provide answers to their users’ prompts. The outputs you get from these tools are not original content and, in some cases, they may even be a direct copy of someone else’s website or creative work. 

Active AR and AI Legal Cases 

Most of the cases involving AR and AI so far have involved claims against data being scraped by the tools themselves to train their systems. Just recently in San Francisco, Google was accused of misusing personal information and copyright material to train their AI systems. Getty Images also sued an AI company for using their images and metadata to train its system. 

Tips for Real Estate Brokers to Minimize the Risks

Not only do brokers need to be aware of their own AR and AI use, but they can also be held responsible for the actions of their licensees. Here are some tips for brokers to minimize the risks:

Be Transparent

Make sure that any AR visualizations are accurate. Brokers need to ensure there is no exaggeration, misrepresentation or concealment of the facts. Using AR to remove visible property defects or to add features that don’t exist is not ethical. However, if you need to remove a washing basket from a photograph, that is a different story. 

Keep Updated About the Laws

Legislation is trying to keep up with emerging technologies as issues arise. Real estate brokers should keep updated on the laws relevant to AR and AI. 

Be Aware of Intellectual Property 

If you and your team use any photos or designs from third-party sources, make sure you have the necessary permissions. This can help avoid intellectual property or copyright infringements. 

Educate Your Team 

Brokers can be held responsible for the actions of their licensees. So it’s important to educate your team about the risks and potential impacts of using AR and AI. Having policies in place to govern the use of AR and AI within your brokerage can help to minimize risks. 

Get Legal Advice

If there is something you are unsure about, contact a specialist real estate attorney to get professional advice. 

Protect Your Real Estate Brokerage

As a broker, you need business insurance to protect against potential lawsuits. CRES, your insurance specialist for real estate professionals and companies, offers a wide range of insurance options. If you need a Business Owner’s Policy, Real Estate Errors and Omissions Insurance, Cyber Liability Insurance, Worker’s Compensation insurance, or Surety Bonds, contact our team at 800-880-2747. We can customize an insurance policy to suit your business.

As part of one of the largest insurance brokers in the world, we have access to more insurance options for real estate professionals than just about anyone. Let us find you the best protection at the best price.

Read more on our ClaimPrevent® Summary: Real Estate Licensee Responsibilities When Creating New Listings

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