2026-09-14
What New York's AI-photo warning and California's AB 723 actually require from a real estate listing image
On November 13, 2025, the New York Department of State put out a formal trend alert warning homebuyers about a specific new problem: artificially generated photos showing up in real estate listings. Six weeks earlier, California had already signed a law about the same problem into effect — AB 723, which took effect January 1, 2026 and makes an undisclosed digitally altered listing photo a real compliance problem for a broker, not just a matter of taste. Neither of these bans altering a listing photo. Both are about one specific thing: whether the alteration touches the property's own depiction, and whether that gets disclosed. That line matters for anyone doing their own marketing around a listing — including where a plain background cutout does and doesn't fall.
What New York's warning actually says
The Department of State's own release, with statements attributed to Secretary of State Walter T. Mosley and State Housing Commissioner RuthAnne Visnauskas, doesn't announce a new rule so much as point out that an old one already covers this: real estate advertising in New York is already required to be an "honest and accurate depiction of the property," and AI-generated images can violate that by producing a "misleading or exaggerated representation." The release gives buyers concrete things to look for — watermarks, blurry backgrounds, inconsistent window views, and listings that look "too perfect," since real homes have small imperfections a generative image tends to smooth away — and tells them plainly not to send money or share personal information before seeing a property in person. For a licensee, the reminder is just as plain: deceptive advertising is already prohibited, and that prohibition doesn't stop applying just because the deception came from an AI tool instead of a person.
What California's AB 723 actually regulates
AB 723 is more specific, because it's a statute rather than a warning. Quoted directly from the chaptered bill text, a "digitally altered image" is one
"created by or at the direction of the real estate broker or salesperson, or person acting on their behalf, that has been altered through the use of photo editing software or artificial intelligence to add, remove, or change elements in the image, including, but not limited to, fixtures, furniture, appliances, flooring, walls, paint color, hardscape, landscape, facade, floor plans, and elements outside of, or visible from, the property."
That's a long, specific list, and it's worth reading closely because the law also spells out what it doesn't cover. The same section excludes
"lighting, sharpening, white balance, color correction, angle, straightening, cropping, exposure, or other common photo editing adjustments that do not change the representation of the real property."
Where an image does fall inside the regulated category, the required fix isn't a ban — it's disclosure. The statute requires a broker to
"include in the advertisement or promotional material a statement disclosing that the image has been altered and a link to a publicly accessible internet website, URL, or QR code that includes, and clearly identifies, the original, unaltered image."
Put plainly: virtual staging, AI-added landscaping, a digitally "fixed" view, a wall repainted in software — all still legal in California under AB 723. What changed is that a broker doing any of that now has to say so, conspicuously, and post the real photo next to (or linked from) the edited one. The bill folds a violation into existing Real Estate Law enforcement rather than spelling out a standalone fine in the section fetched here, so the honest thing to say is that it's a real compliance obligation, not that a specific dollar figure is confirmed from the primary text.
The line both rules actually draw
Read New York's warning and California's statute side by side and the same boundary shows up in both: what's regulated is an edit that changes what the property looks like — its fixtures, its furniture, its landscaping, the view out its windows, whether a wall is a different color than it really is. A photo edit that never touches any of that isn't the thing either rule is aimed at, because there's nothing about the property's own depiction left to mislead a buyer about.
| Example edit | Touches the property's depiction? | Falls under AB 723 / NY's warning |
|---|---|---|
| Adding virtual furniture to an empty room | Yes — furniture is named explicitly | Yes — disclosure + linked original required |
| Digitally repainting a wall, "fixing" landscaping, or removing a utility pole from the yard | Yes — paint color, hardscape, and landscape are all named explicitly | Yes |
| Standard exposure, white balance, straightening, or cropping on an otherwise real photo | No — expressly excluded in the same section | No |
| Cutting a person or object out of its own background for a separate piece of marketing layout (a postcard, a yard-sign insert, a social graphic) | No — the property itself isn't in that image, or its depiction isn't changed by isolating the subject | No, by the same "changes the representation of the real property" test |
That last row is the honest, narrow one worth being precise about, and it's not a loophole so much as a different category of image entirely. A "Just Listed" postcard with the agent's own photo popping out from behind a colored banner, or a "meet your agent" graphic for a listing's social post, isn't a photo of the property with something added or removed — it's a picture of a person, isolated, used in a layout the property photo never appears altered inside of. Nothing about it misrepresents what the house looks like, because the house's depiction was never touched.
Where NearBG fits here — stated narrowly
NearBG's actual job is exactly that isolation step, and nothing past it. Drop in a photo of an agent, a team, or an object worth calling out on a spec sheet, and the same on-device U2Netp segmentation model this blog's first post documents removes the background automatically, entirely in the browser — no upload, no account, nothing sent anywhere before a listing (or an agent's own headshot) is public. The manual touch-up brush then cleans up anything the model missed, directly on the canvas. The output is a transparent PNG at the source photo's own resolution, ready to drop into whatever postcard, sign, or social template a marketer is already using.
What NearBG doesn't do
- No virtual staging. NearBG doesn't add furniture, fixtures, or decor to a room, and it doesn't composite the cutout it produces onto a background at all — the output stays transparent. Anyone who actually wants virtual staging needs a different, purpose-built tool, and this post's disclosure rules apply to that tool's output, not to NearBG's.
- No property-photo editing of any kind. NearBG's segmentation model isolates a subject from its background; it has no feature for repainting a wall, adding landscaping, or altering anything about a room or a house's own depiction.
- No cover-template or spec-sheet layout. The output is one transparent PNG. Placing it into a postcard, a yard-sign template, or a spec sheet happens in whatever design tool does that layout.
- One photo at a time, no batch. A team page with several agents, or a spec sheet with several featured items, means running the tool once per photo.
Honest summary
The New York Department of State's November 13, 2025 trend alert and its named officials' statements are quoted directly from the department's own press release. California AB 723's definitions, exclusions, and disclosure requirement are quoted verbatim from the chaptered bill text on the legislature's own site; its January 1, 2026 effective date is corroborated by multiple outlets tracking the bill rather than stated in the specific section fetched here, and no specific penalty amount is claimed because the section fetched doesn't spell one out. None of this is legal advice — a broker's own MLS may set a stricter or differently formatted disclosure than the statute's floor, and that's worth checking directly rather than assuming. What NearBG does and doesn't do — an on-device subject cutout with a manual touch-up brush, one photo at a time, no compositing, no staging, no batch or template — is this tool's real, current, shipped scope, and it's a narrower, different thing than the virtual-staging category these new disclosure rules are actually aimed at.