Every now and again, we'll get a call after someone has seen a listing online. "OMG, you can buy that new, modern house for such a reasonable price?" But no. The answer is no. The listing is for land, but maybe with some plans. The pictures don't show the house for sale. They show an architect's rendering. You'd still have to build the house. That's part of how a recent listing at 644 11th St. in the Hill Section was advertised. The 14,700 sqft. lot sold for $8.800M. (One of the renderings of a new house from that listing is featured at the top of this post.) The lot contains an 80s/90s vintage house, but what was really for sale was the lot and full architectural plans. Some day, you might see a house like the one pictured above on site. Or there's 304 The Strand, newly in escrow, with a list price of $13.999M. Similarly, there's an existing house that got some remodeling about 10 years ago, but the dirt underneath is simply too valuable for an older house to survive. It's a lot sale, with plans. (304 The Strand is listed by Kevin Pratt, Strand Hill Properties.) We doubt that too many real buyers are really confused in these situations, as anyone shopping for land in the Hill Section or on The Strand is going to have a pretty good idea what a finished house sells for, as opposed to bulldozer bait. Still, there is something of a real consumer-protection issue here. You see it more and more thanks to new-generation online tools. Virtual staging is running rampant these days. It's easier and cheaper than ever to upload a series of lame photos of an old, yucky house and have A.I. spit back out photos of a vibey, modern, well-appointed house. Some of the new systems will virtually "paint" the interior and exterior, add light fixtures, "green up" a lawn, and do more and more beyond just adding realistic-looking furniture. So when people see these images online, especially when they're featured images, are they being misled? Even if the later photos include unretouched, simple, true images of the yucky, old house, has the damage been done by the "first impression" of a pretty, nice house that people saw first? There's some chatter now, and we might see rule changes in the MLS. A state legislator from Silicon Valley has even made noises about writing legislation to regulate or prohibit marketing a home with "misleading" images. (Disclosure: Dave serves on the Rules Committee of the area's main MLS, CRMLS, and on the Board of Directors of the California Association of Realtors, where this topic has been discussed.) Existing MLS rules say that images "must be a truthful representation of the property in all respects." Another rule bars the use of "misleading images." There's some wiggle room, in that listing agents can add captions to photos that are not directly of the property. (That's how it's done, for instance, on 304 The Strand, from above.) The problem with the "caption" loophole is that 90 or more of all views of listings online occur on platforms that do not display any captions that were entered with the photos in the MLS. All that consumers see is the photos. You can't ignore this problem. As marketers, we always preach the importance of first impressions. And on this issue, we think first impressions from MLS photos could be better regulated. The point is not to ever trick or mislead consumers. We'd go with watermarks on a lot of photos, especially virtual staging or A.I. paint jobs. Whether you just use the cool little "futuristic" star logo that's associated with A.I. in many places, or include something clear like "Ai" in this logo variation, what you want is a clear "label" on photos that aren't real. Renderings really aren't "A.I." and might need a little different watermark/label. We're not trying to solve it all here today. We'd rather see freewheeling use of manipulated images with disclosure on the images themselves, and not ask people to rely on something outdated - like the idea that consumers are seeing listing photos in the MLS with "captions." Nope, that horse ran away from the barn a long time ago. There's a good way to balance sellers' need to show things "how they could be" with consumers' right to see things "as they really are."
