Super Tool or Scam Attractor? When AI Turns Risky in Real Estate

AI can find your dream home – but it can also impersonate your agent and steal your deposit. Learn how to spot the difference.

Imagine a near-future real estate experience involving a virtual assistant who knows your taste in countertops, a chatbot that helps write your property’s listing copy, or a digital eye that scans satellite images to price your property. The age of Artificial Intelligence in real estate, where technology is transforming how we buy, sell, and live in our homes, isn’t around the corner… It’s HERE.

But while AI promises convenience, efficiency, and savings, it also introduces new risks. In a region as diverse as ours – spanning high-tech hubs in Northern Virginia, cozy neighborhoods in Maryland, luxury condos in D.C., equestrian estates in the western suburbs, and rural land in West Virginia – the technology’s influence can be both helpful and harmful. And anyone involved in a real estate transaction needs to keep alert for ways criminals are using AI to derail transactions and steal funds.

Here’s how AI is shaping the housing market for consumers – and what to watch out for.

The Good: AI Tools That Help You Buy or Sell Smarter

Many parts of the homebuying process are already influenced by AI tools, which are used by a growing majority of real estate agents who appreciate a streamlined process for everyone: less paperwork, more personalization, and faster deals.

Platforms like Zillow, Redfin, and Realtor.com use AI to suggest homes based on browsing behavior, tracking what you click on to deliver tailored, personalized results.

On the seller’s side, real estate agents turn to AI to make a property’s marketing stand out with descriptive copy that can be fine-tuned in seconds to specific audiences and social media platforms (ChatGPT is the most popular, but Google’s Gemini, Jasper AI, and Copy.ai are among many other competitors). Within MLS databases are a treasure trove of information that agents are using to help uncover inventory, using AI to find owners who may be ready to list based on mortgage balance, length of ownership, and whether the property is owner-occupied.

Even smart thermostats like Google Nest use AI to learn your habits and make homes more energy-efficient, just one of many home features using AI to make a home more attractive to potential buyers.

The Bad: When AI Is a Tool For Fraud

What AI giveth, AI also taketh away. The same tech that streamlines sales and other real estate transactions can also be weaponized by scammers, and no one, from agents to their clients to mortgage and title professionals, is immune.

You’ve probably seen deepfake videos of celebrities or politicians, but what used to look like digital trickery now feels eerily real. In 2024, multiple fraud cases surfaced involving AI-generated voices and videos impersonating real estate agents. In several instances, buyers received emails or phone calls from someone who sounded exactly like their agent, guiding them to wire money to a fake account. The communications were slick, convincing, and completely fraudulent.

AI is also helping scammers fake property and title documents, forge signatures, and redirect private communications to capture sensitive information. Even the storied Graceland – GRACELAND! The famous home of ELVIS! – was the target of a brazen scam that required a court intervention to stop thieves from stealing the property out from under the Presley estate. These tactics are especially risky in rural and exurban regions where empty or unmonitored lots can be easy targets.

The final stretch of a sales transaction is where criminals are most likely to strike, with wire fraud being the most common tactic, as it takes advantage of buyers and sellers who may be seeing important but unfamiliar paperwork for the first time. AI-generated phishing emails targeting homebuyers just before closing will spoof the names of real estate agents, title companies, or lawyers offering “guidance” and instructing recipients to send their down payment or closing costs to a fake bank account.

Just last month at the REALTORS® Legislative Meetings held in Washington, DC, cryptocurrency and “pig butchering” – an ugly term that refers to criminals “fattening up” a mark before stealing their money – took center stage as agents shared their stories of being scammed… and the shame that accompanied being the target of this particular kind of increasingly common crime.

How To Stay One Step Ahead

Federally, the Automated Valuation Model rule improves protections for consumers in mortgage/appraisal contexts, but currently, none of our local jurisdictions have enacted AI laws specifically governing real estate transactions. Maryland House Bill 1331/”Consumer Protection – Artificial Intelligence” is working its way through the legislative process and aims to regulate the development and deployment of high-risk AI systems, ensure fair and equitable decision-making by AI systems (particularly in areas where they impact individuals’ lives), and focus on transparency, accountability, and risk mitigation.

Knowing that AI is now firmly entrenched in so much of our consumer activity is the first line of defense. Here are just a few tips to keep in mind:

Ask your agent how they use AI. A good real estate professional in today’s market should be able to explain how they’re using (and securing) AI tools on your behalf.
Always verify wire instructions in person or over the phone. Never rely solely on email. Use contact info you already have – don’t trust a new email or phone number without verifying.
Check your property records regularly. If you own land or a second home, make sure your name is still on the deed.
Be wary of “too good to be true” listings. Scammers use AI to generate fake rental or sale listings, often with eye-catching photos and below-market pricing. Cross-reference listings on multiple platforms and schedule in-person tours with a licensed agent.
Secure your smart home devices. If you’re selling a home with connected tech (smart locks, cameras, etc.), reset to factory settings before transferring ownership. And never connect your smart devices to public Wi-Fi.
Be cautious of AI-powered homebuying/selling apps that require sensitive financial info without strong encryption. Double-check for apps that look or sound similar to more established apps. Verify, verify, verify!
Never respond to unsolicited texts, social media messages, or emails soliciting an investment. Be cautious when sharing personal information online, as scammers will exploit personal details to build trust.
Report cybercrimes and suspicious online activity to the Internet Crime Complaint Center (IC3). The Internet Crime Complaint Center (IC3) is the central hub for reporting cyber-enabled crime. It is run by the FBI, the lead federal agency for investigating crime.

AI isn’t going anywhere, but neither is common sense. By staying informed, working with the trusted, professional agents at Corcoran McEnearney, and double-checking key details, you can harness the power and benefits of AI without becoming a cautionary tale.