Buyer Beware: Hollywood Special Effects Now Permeate Property Listings
Buyer Beware: Hollywood Special Effects Now Permeate
Property Listings
Technology lets home sellers change photos to stage rooms
with virtual furniture and perform HGTV-style makeovers
By Ryan Dezember Updated March 4, 2019 11:00 a.m. ET
Real-estate listing photos have always accentuated the
positive, but computer-generated imagery of the sort Hollywood uses has now
become so cheap and prolific that home sellers are taking out walls, removing
ugly paneling and even adding digital swimming pools.
At the same time, photos are more important than ever:
Nearly every home search begins online and deals are often struck without
in-person showings, particularly among investors who are putting photos through
their own algorithms to price homes as they make an unprecedented move into the
U.S. housing market.
The technology allows sellers to green browned lawns,
stage rooms with virtual furniture like digital dollhouses and even perform
full-blown HGTV-style makeovers with clicks of a mouse.
The hazards to buyers range from disappointment when they
arrive for in-person showings to blown renovation budgets. That could prove an
especially thorny issue for investors, who may need to retrain computer models
they use to comb through listings for houses that are good candidates to turn
into rentals or flips.
Risks associated with doctored listing photos could
spread beyond sight-unseen buyers. Federal rule makers are considering a
proposal to open up more of the home-appraisal business to computers that
generate property values partly by scraping online listing photos to gauge
condition and finishes.
Redfin Corp., the discount online real-estate broker,
said that 20% of 1,463 recent home buyers it surveyed in May said they had made
offers on houses they had never visited. In 2017, when the market was hotter,
as many as 35% of the individuals who responded to a similar study said they
had made offers sight unseen, Redfin says.
HouseCanary Inc., which uses algorithms to value homes
for investors, can differentiate between real homes and lifelike renderings
that builders use to illustrate future construction. But its computers haven’t
yet been trained to tell real interiors from fakes, said Alex Villacorta, the
company’s executive vice president of data and analytics.
“We don’t have an explicit model that identifies if an
image is virtually staged but that is something that our algorithms have the
ability to learn,” he said.
The computer-generated images are so good these days that
humans have trouble spotting them. That’s causing problems for regional broker
cooperatives, known as multiple listing services, that serve as repositories
for property listings and sales data.
At a recent conference for brokers in New York, an
executive from property photo-editing firm BoxBrownie.com Pty Ltd. urged agents
to post altered photos side-by-side with the originals. However, Peter
Schravemade, the Australian firm’s strategic relationship manager, said that
labeling augmented images has occasionally gotten agents in trouble while
altered images without disclosures have slipped past listing-site overseers.
For $1.60 per image, BoxBrownie will punch up pictures of
a house for sale, making dull skies blue, patching lawns and maybe popping
photorealistic flames into fireplaces. It charges $2.40 to change wall colors
and $24 to swap out flooring. Starting at $64, it will virtually renovate a
room to produce a marketing image that looks realistic but nothing like the
real thing.
“We’re like Photoshop on steroids,” BoxBrownie co-founder
Brad Filliponi said of the popular photo-editing program.
Redfin employs a San Jose, Calif., company called roOomy
to virtually stage vacant listings—right down to digital knickknacks—and says
it discloses when the furniture in images is fake. “Empty homes online are not
super appealing,” said Quinn Hawkins, who leads Redfin’s business unit that
flips houses in Southern California and Dallas. “It’s hard to figure out where
your furniture is going to fit.”
Roofstock Inc., which operates a platform on which
investors buy and sell occupied rental homes, uses a service that scrubs dirty
dishes and other clutter from interior photos. Rich Ford, a Roofstock founder,
said erasing décor like family photos preserves tenant privacy.
Corcoran Group agent Tim Davis, who sells
multimillion-dollar properties in New York’s Hamptons, virtually staged an estate
in modern style in case the existing Victorian furnishings weren’t to buyers’
tastes. He posted computer-generated images alongside actual photos.
Staging homes with rented furniture is an old technique
that sellers use to give potential buyers a sense of scale and how stodgy
properties might look updated. Staging can cost thousands of dollars, though,
so it’s usually used on luxury properties.
Virtual staging has emerged as a much cheaper option—and
one that enables sellers to do far more than show what sort of furniture a room
can fit.
But this also puts altered listing photos in the path of
Wall Street-backed firms. Companies like Open Door Labs Inc. that are trying to
perfect programmatic flipping make offers on some properties sight unseen at a
computer’s recommendation. Big rental investors sometimes spit out offers for
single-family homes within minutes of them hitting the market.
The ease and extent to which images can be altered has
brokers and the organizations that police listings wondering where to draw the
line on augmented images.
The National Association of Realtors code of ethics
requires agents to present a “true picture in their advertising, marketing and
other representations,” which extends to listing photos, a spokeswoman said.
Donald Epley, a retired University of South Alabama real-estate professor who
helped write national appraisal standards, said misleading photos are no
different than fudging the square-footage or misstating the number of bedrooms
in listings.
“This is a really new technology,” said Denee Evans,
chief executive of the Council of Multiple Listing Services, a trade
organization. “It’s just starting to bubble up questions as to where is that
line.”
Ms. Evans said establishing guidelines for altered images
is one of the organization’s priorities. One issue, she said, is that many
listing services don’t allow images to be watermarked, which makes it difficult
to ensure that disclaimers remain attached to augmented photos.
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