Artificial Intelligence (AI) is changing life as we know it, and that includes the real estate industry. In many ways, AI is enhancing the home buying experience. Unfortunately, cybercriminals are often “early adopters” of new technologies, and AI is no exception. With AI, seeing is no longer believing. AI allows fraud so prevalent that verifying all aspects of a real estate transaction is now a necessity. 

According to Cybernews, “Some industry insiders believe that perpetrators can use AI to deceive and victimize people more effectively than any other technology.”  

ChatGPT is so good at impersonating other professionals or clients that it can fool agents into giving out financial or personal information.

ChatGPT Dangers

ChatGPT offers a lot of benefits to realtors. In seconds, it can perform many of the mundane tasks that formerly took up a considerable amount of human work time. Customers receive instant responses to inquiries. While ChatGPT can make your real estate office run more smoothly and efficiently, there is also a serious downside. ChatGPT makes scams much harder to spot. 

Criminals are perfecting the art of impersonating legitimate organizations to steal information. AI voice synthesis allows it to sound like a party involved in the transaction. ChatGPT is so good at impersonating other professionals or clients that it can fool agents into giving out financial or personal information. Victims may have their identity stolen in addition to any financial loss. 

Not long ago, figuring out a listing was fraudulent was far easier. Now, a scammer can run their fake listing through ChatGPT and what emerges sounds legitimate, without those spelling and grammatical errors that gave the game away. 

Bias In, Bias Out 

Keep in mind that large language models, such as AI, are only as good on the data they were trained on. Biased information results in ChatGPT producing biased answers. That could put you in violation of Fair Housing Laws and potentially harsh penalties. Saying you were unaware of this discrimination because ChatGPT generated the information is not a defense should a plaintiff file a complaint.    

Virtual meetings are the norm. How do you distinguish between an actual client and someone who intends to commit fraud?

Deepfakes in Real Estate

Location, location, location is the real estate mantra. It’s vital that AI does not replace it with deception, deception, deception in the public’s mind as deepfakes become more common. Just as AI can generate photos of people who do not exist in real life, it can do the same with houses. AI easily creates phony virtual tours. Even worse, these deepfakes may appear on legitimate platforms, making identification more difficult. 

An agent could end up getting a listing for a property that doesn’t exist or writing a sales contract for a fake property. Even if the property does exist, it may not look at all like the photos or videos presented. For instance, there may not have been any upgrades to the dwelling since it was built in the 1960s, but the photos show a completely remodeled, state-of-the-art home. 

Keep in mind that there is really no limit to deepfake frauds. Besides fake properties, fake buyers, and fake sellers, AI deepfakes can impersonate real estate professionals, create fake online property tours, and generate fake reviews and testimonials for brokers or agents with less-than-stellar reputations. 

Verification goes beyond the buyer, seller, and other agents. Expand it to include title companies, lenders, and other parties involved in the transaction.

Property Title and Deed Fraud

Deed fraud, or title theft, is a growing problem. The National Association of Realtors (NAR) reports that AI systems are creating false property documents that can deceive everyone involved in a real estate transaction. Home title or deed theft often involves the thief fraudulently refinancing the home via a HELOC or home equity loan, stealing the home’s equity. 

Genuine vs. Fake Virtual Meetings

In Florida, real estate agents commonly sell properties to clients around the world. Virtual meetings are the norm. How do you distinguish between an actual client and someone who intends to commit fraud?

The answer is authenticating every meeting, whether virtual or in-person. One realtor recommends asking virtual clients to hold up government-issued ID, so she can verify the photo on the document matches their face. She then asks for permission to enter their information onto Truthfinder.com, a paid site that permits users to search public records to perform a background check. 

Verification goes beyond the buyer, seller, and other agents. Expand it to include title companies, lenders, and other parties involved in the transaction. 

Make sure your business employs strong security measures to keep hackers at bay.

AI Detector Systems 

What about using AI detector systems? Image analysis allows the system to identify altered images. It also detects AI-generated property descriptions, which may contain misinformation. 

While these systems can flag fake information and detect fraud, they are not infallible. AI retrieves information from multiple sources, and some of this info is unsourced or just plain wrong. While those in the real estate industry should utilize AI detectors, it is imperative that agents conduct their due diligence if AI determines the information is legitimate. 

Avoiding AI Real Estate Scams 

Lower the risk of deepfakes by ensuring your employees are well-versed in cybersecurity best practices. Use multi-factor authentication for all accounts. Train staff to recognize fake information. Educate staff about phishing emails, the primary conduit by which hackers gain access to personal and financial information. 

• Always verify the identity of a property’s seller and buyer independently. 
• Avoid property title and deed fraud by confirming the document’s authenticity with county records.
• Call lenders directly to confirm after receiving pre-approval letters. 
• Review all AI-generated property listings for accuracy.
• Call to confirm any email with wiring instructions. 
• If possible, visit listed properties in person.

The bottom line is that cybercriminals are targeting the real estate industry via AI and the industry must respond to protect its reputation and avoid huge financial losses. Make sure your business employs strong security measures to keep hackers at bay. Review and update your security protocols regularly. Cybercriminals never let up, so staying one step ahead one ahead of them is crucial.