When Smart Tools Create Stupid Problems

In today’s fast-paced real estate market, technology is everywhere — from digital land records, AI-generated listing descriptions, virtual staging and remote closings. These tools promise efficiency, convenience and a competitive edge. But what happens when those same tools open the door to fraud, miscommunication or legal risk? As real estate professionals increasingly rely on “smart” solutions, it is crucial to recognize that technology is not foolproof — and sometimes, it can create more problems than it solves.

 You may have heard about the April 2025 cyberattack in Iowa County, Wisconsin, when ransomware hit the county’s computer network. This disrupted services, including access to land records maintained by the local register of deeds. As a result, most real estate transactions in Iowa County are experiencing closing delays due to the records being unsearchable. The county is actively working to restore and rebuild its network, but it is unclear how long the recovery process will take. Iowa County has been posting frequent updates about its recovery process to keep the public up to date. To see the most recent updates, visit the Iowa County website.

When a title insurance company cannot search the records, it is unlikely to take the risk of insuring title on a property. Without title insurance, both lenders and buyers are unwilling to take the risk of closing. The resulting closing delays cause problems for everyone. Buyers are losing interest rate locks, having to find other housing and storage, and might not be able to close on their sales. Sellers too are burdened by not receiving expected proceeds and not being able to move to their new properties. Agents are scrambling to renegotiate deals with pre-closing occupancy agreements and other amendments and are also not getting expected commission checks on these transactions that are not closing.

Wire fraud remains a serious threat in real estate, with criminals stealing earnest money, down payments or even full purchase funds by sending fake wiring instructions that appear legitimate.

Hackers typically breach the email of someone involved in the transaction — often an agent, lender or title company — giving them access to sensitive information. Posing as a trusted party, the fraudster then sends the buyer fake wiring instructions from a look-alike email address.

Once the funds are sent to the fraudulent account, they are nearly impossible to recover, and the criminals are often outside the reach of U.S. law enforcement.

While it is frequently the consumers in the transaction who invite vulnerabilities into electronic communications, there are plenty of instances where it was the agent’s email that was compromised, opening the door for the hacker. For that reason, most agents steer clear of sending wiring instructions to parties. This is such a concern with wire fraud that the Wisconsin Department of Safety and Professional Services, by way of the Real Estate Examining Board, added a wire fraud warning to all the WB listing contracts, buyer agency agreements and the offers to purchase. 

“WIRE FRAUD WARNING! Wire Fraud is a real and serious risk. Never trust wiring instructions sent via email. Funds wired to 
a fraudulent account are often impossible to recover.

Criminals are hacking emails and sending fake wiring instructions by impersonating a real estate agent, Firm, lender, title company, attorney or other source connected to your transaction. These communications are convincing and professional in appearance but are created to steal your money. The fake wiring instructions may even be mistakenly forwarded to you by a legitimate source.

DO NOT initiate ANY wire transfer until you confirm wiring instructions IN PERSON or by YOU calling a verified number of the entity involved in the transfer of funds. Never use contact information provided by any suspicious communication.

Real estate agents and Firms ARE NOT responsible for the transmission, forwarding, or verification of any wiring or money transfer instructions."

Seller impersonation fraud is an increasingly common fraud targeting real estate transactions — particularly vacant, mortgage-free land. Criminals pose as property owners and contact agents, usually via phone or email, to list the property, often at below-market value to attract quick cash offers.

They typically cite urgent personal reasons for the low price and also request fast closings. As closing nears, they insist on using a remote notary — who may also be impersonated — and submit falsified documents. Once the sale closes, the title company transfers the proceeds to the criminal, making the fraud nearly impossible to reverse.

The United States Secret Service Cybercrime Investigations has the following tips to avoid this fraud:

1. Independently search for the identity and a recent picture 
   of the seller.
2. Request an in-person or virtual meeting to see their government-issued identification.
3. Be on alert when a seller accepts an offer below market value in exchange for receiving the payment in cash and/or closing quickly.
4. Never allow the seller to arrange their own notary closing.
5. Use trusted title companies and attorneys for the exchange of closing documents and funds.

One effective way to verify a seller’s identity is to mail a confirmation or thank you letter to the tax bill address on file — not by email, but through the U.S. Postal Service. While not every quick-sale vacant land listing is a fraud, this step can help flag fraudulent activity.

The letter should thank the owner for the listing and include a note advising them to contact the agent immediately if they are not selling the property. If it is a fraud, the real owner should be encouraged to report it to law enforcement.

Consumers can file fraud complaints through the Wisconsin Department of Justice website.

Using artificial intelligence (AI) to write property descriptions in real estate can be highly efficient, but there are several risks to consider, especially when it comes to legal compliance, accuracy and brand perception.

Fair housing violations

AI-generated descriptions may unintentionally include discriminatory language that violates the Fair Housing Act; for example, implying preference for a certain race, family status or disability. Phrases like, “perfect for young professionals” or “ideal for families” can be problematic. AI may learn biased patterns from training data if not properly filtered.

Inaccuracy or exaggeration

AI might generate content that overstates features or includes inaccurate information, especially if the input data is incomplete or unclear. It might describe a “spacious backyard” when the yard is small. Misrepresentation can lead to buyer disputes or ethical complaints.

Lack of local knowledge or nuance

AI may miss hyper-local context or fail to tailor language to a specific market, and this can lead to missed marketing opportunities or off-target messaging.

Overuse of generic or repetitive language

AI can default to clichés or formulaic phrases like “must-see,” “charming home” or “won’t last long.” It can make listings sound bland or indistinguishable from others and may reduce engagement or interest from buyers due to lack of originality.

Ethical concerns and consumer trust

Relying heavily on AI without disclosure can raise questions about authenticity and transparency, particularly if clients expect a personal, professional touch.

Compliance with MLS or firm standards

Some Multiple Listing Services (MLSs) or firms may have rules about how property descriptions are written, including formatting, permitted terms or required disclosures. Violations could lead to fines, required corrections or removal of the listing.

Best practices to mitigate risks

• Review all AI-generated content carefully.
• Train AI on compliant, accurate data.
• Avoid language that could be interpreted as discriminatory or misleading.
• Use AI as a drafting tool — not a final copywriter.
• Stay current with advertising and fair housing regulations.

Virtual staging and virtual enhancements are powerful tools in real estate marketing, but they come with significant risks if not handled transparently and ethically.

If virtual staging or enhancements alter the property in a way that misleads potential buyers, it could be considered false advertising:

• Editing out flaws like cracks, stains or damage.
• Adding furniture or finishes that are not representative of the property’s actual size or layout.
• Digitally enhancing views, lighting or landscaping.

Advertising in a way that is false, deceptive or misleading can lead to legal consequences under state real estate laws or consumer protection laws, complaints to the REEB, and a loss of trust or credibility with buyers.

If virtual staging emphasizes features that appear to target or exclude specific demographic groups, agents could be in violation of the Fair Housing Act. For example, only showing staged rooms with a nursery or religious symbols might be seen as subtly steering.

Failing to clearly disclose that images have been virtually staged or digitally altered can be considered unethical or deceptive. Virtual staging can set unrealistic expectations about space, condition or design potential. For example, a buyer may think a room is larger or brighter than it is in reality due to wide-angle lenses and digital enhancements. This can result in wasted time from showings that do not meet expectations, erosion of buyer trust or negative reviews or complaints.

Best practices to reduce risk

• Always disclose when images are virtually staged or digitally enhanced — both in photo captions and listing remarks.
• Avoid removing or concealing defects that a buyer would discover in person.
• Label edited images clearly; for example, “virtually staged” or “digital rendering.”
• Include unedited photos of each room or exterior if virtual staging is used.
• Follow local MLS rules and fair housing guidelines carefully.