Real estate pro Ryann Brier remembers the disappointment on her clients’ faces after being “catfished” by a listing. They fell in love with the online photos of what appeared to be a lakefront home in West Michigan—sunset images glimmering over the water, floor-to-ceiling windows promising sweeping views.
Then, they arrived in person.
The home was on the opposite side of the road from the lake. Views were partially blocked by a neighboring home—and another home under construction would soon block the rest.
“They saw that view online where it had a beautiful picture of this Lake Michigan sunset, and then the home was definitely not what they pictured,” says Brier, a real estate pro with City Lights Home Buyers in Grand Rapids, Mich. “Immediately when they saw it, they were like ‘we’re out.’”
This disconnect between digital listings and reality is being called “housefishing” or the more general label of “catfishing”—when online appearances don’t match up to real life.
“It’s kind of like dating,” Gabriella DeBartoli, a real estate professional with the DeBartoli Real Estate Group, part of Huntington and Ellis, in Las Vegas, told Real Estate Today. “You’re going through all the pictures, everybody’s putting their best photo forward and then when you see it in person, it can go one or two ways. One, it’s better than the photo—which, yes, score, yay us. Or, you’ve been catfished, which happens more often than not.”
Some states—like California and Wisconsin—are now cracking down, passing disclosure laws aimed specifically at digitally altered property images.
The Property Marketing Conundrum
About half of real estate agents surveyed say their buyers expect homes to look like they were staged on TV shows, according to the National Association of REALTORS®’ 2025 Profile of Home Staging.
“Buyers are really looking for that ‘move that bus’ energy [from ‘Extreme Makeover: Home Edition’] but it’s not always that level of reveal,” Brier says. “TV and Instagram can set expectations to an unrealistic level.”
Yet the online presentation may matter more than ever to get buyers to the front door. Most start their house hunt online, and 81% consider listing photos the most important factor when evaluating properties, according to NAR research.
With AI-powered photo tools, filters and virtual staging, agents can remove clutter, brighten rooms, digitally furnish spaces and even reimagine layouts. Wide-angle lenses can show off spaciousness.
But some buyers feel misled if enhancements become exaggerations.
“A listing can look amazing and like a million bucks online,” Brier says. “But then when you get there, it’s dark, the beautiful bright walls are yellow and dingy, and it smells weird.”
Still, “if used correctly and not to deceive buyers” virtual staging can be a great marketing tool, says Krisztina Bell, a pioneer in the virtual home staging industry and founder of No Vacancy Home Staging in Atlanta. Transparency is key, she says: Buyers should know when images are digitally altered, such as by noting it on the photo or within the property’s remarks section.
Bell says virtual staging works best when it clarifies a space, not replaces reality, like by digitally staging right-sized furniture in an otherwise empty home. It can also be used to help buyers see past the current homeowners’ strong design choices or declutter when sellers refuse.
“Virtual staging is great for driving buyer traffic to a property,” she says. “But once they get there, you still have to sell it.” Her preferred approach combines digital with physical staging. “So, you get the clicks and the views online, but then there’s also furnishings when they visit the home,” she says.
When Showing Possibilities Becomes Disappointment
Problems often arise when photo edits disguise the home’s condition, scale or cost. For example, filters can brighten walls, erase stains and make rooms feel larger.
Certainly, “the filters will brighten up photos, which is great for an online profile,” Brier says. “But it’s a huge disappointment when you get there and it’s dark, the kitchen isn’t as bright as you thought, and the backsplash doesn’t pop. Also, the AI filters may have brought out a sense of cleanliness to the house” that doesn’t match reality.
DeBartoli urges her buyers not to get distracted by staging or aesthetics. “The staging can throw us all off,” she says. “But do not let that throw pillow excite you to where [you don’t notice] there’s a sinking foundation under that beautiful couch.”
Brier notes that photos masking needed repairs are particularly problematic. AI can remove cracks, stains or other flaws—but once seen in person, the home’s condition not only can disappoint but also suddenly price out buyers and leave them with a sense of distrust.
Disclosure Laws Are Surfacing
The use of virtual tools in real estate is prompting more scrutiny by lawmakers. The New York Department of State recently warned about the rise in AI-generated photos in listings that, they warn, could violate deceptive advertising rules. California went further: On Jan. 1, listings with digitally altered images must include disclosures—and access to the original, unaltered photos. Wisconsin is set to follow with similar requirements in 2027, requiring disclosures for the use of AI or tech tools that modify a home’s appearance in photos, such as through virtual staging, replacing skies, grass or furniture or removing visual elements—like electrical wires or stains—that could mislead buyers.
The Wisconsin REALTOR® Association has urged its members to review and disclose photo alterations. “Transparency here protects both the buyer and the licensee from misunderstandings or from potential misrepresentation claims,” Jennifer Lindsley, WRA’s director of legal services and licenses, notes at WRA.org. “Virtual staging is fine—so long as buyers know it’s virtual.”
At the national level, NAR reminds members that its Code of Ethics requires agents to “refrain from exaggerating, misrepresenting or concealing pertinent facts” of a property (Article 2) and to present a “true picture” in advertising and marketing (Article 12).
General industry guidance often includes clearly labeling edited images, not substantially changing a property, and avoiding any concealment of property defects.
What Qualifies as a ‘Digitally Altered’ Image?
California’s new law offers some insight into the extent that “digitally altered images” in real estate would require a disclosure in the state. It applies to adding, removing or changing elements, such as the property’s:
- Fixtures, furniture, appliances, flooring, walls and paint color
- Hardscape, landscape and home’s facade
- Floor plans
- Outside elements, including those visible from the property, like streetlights, utility poles and neighboring properties
What isn’t included: Lighting, sharpening, white balance, color correction, cropping, exposure or other common photo editing adjustments that don’t change the representation of the property.
Transparency upfront saves everyone time in the transaction, Brier says.
“It’s sad because the expectations can be way up when you see a home online, and then the reality of seeing it in person can bring the buyer right back down,” she says.
“It’s a disadvantage for the seller, too. When buyers go in expecting your listing price to match the overall condition and presentation of the house—and then it doesn’t—the seller may end up with a lower offer.” Plus, she adds, misleading photos could miss out on hooking buyers who might otherwise have been the perfect match.
