Key Takeaway: A digitally altered image is a listing photo changed so that it no longer shows what a buyer would see standing in that space. California requires a disclosure on those images and access to the original. The test is what the edit changes, not which software produced it.
TL;DR About AI Listing Photo Disclosure
- The edit decides disclosure, not the tool
- Virtual staging counts as a digital alteration
- Lighting and cropping edits do not
- California AB 723 took effect January 2026
- Label the image and provide the original
- Video follows the same alteration test
A digitally altered image is a listing photo changed so that it no longer shows what a buyer would see standing in that space.
Agents often assume the disclosure is triggered by the software used. It is triggered by what the edit changes.
California put the requirement into statute in January 2026 and MLS handbooks have been adding matching rules since then.
This article covers how to sort an edit, how to label it, and how the same test applies to listing video:
Table of Contents
What Counts as a Digitally Altered Image
An image is digitally altered when software or artificial intelligence has been used to add, remove, or change a physical element of the property.
It applies to the listing agent and to anyone producing listing media on that agent’s behalf, such as a photographer or an editing service.
Sorting an edit takes one question. Does the image still show what a buyer would see standing in that room. Adding furniture to an empty room changes the answer, so virtual staging is an alteration. So is erasing a car, replacing a sky, or showing a renovation that has not been done.
A photo edit is the contrasting category. Exposure, white balance, color correction, cropping, straightening, and sharpening present the same property more clearly. Those do not carry a label. AI tools already sit inside listing work, which is why the test is written around the edit rather than the tool.
What California AB 723 Requires
California Assembly Bill 723 added section 10140.8 to the Business and Professions Code. It requires a real estate broker or salesperson, or a person acting on their behalf, who uses a digitally altered image in advertising or promotional material for a sale, to include a statement that the image has been altered and a way to reach the original. The full bill text carries the definition the statute uses.
The requirement took effect on January 1, 2026. It applies at the point of publication, so it belongs at the same step in the workflow as photo upload.
The scope language reaches any person acting on behalf of the broker or salesperson, which covers vendors and staff as well as the licensee.
The statute leaves several things open. It does not specify exact wording, it does not set a placement standard beyond being conspicuous, and it does not address listing video.
Where the Label Goes and How to Keep the Original Reachable
The disclosure belongs on the image or immediately next to it. A note buried in property remarks is not on the image, and a buyer scrolling photos on a phone will not see it.
The original must be reachable. Where the listing sits on a site the broker or agent controls, the unaltered version goes into the same posting. A link, a public gallery, or a QR code also meets the access requirement when the disclosure says how to reach it.
Handling inside the MLS varies. Your MLS may provide a photo field, may require caption text, or may direct the disclosure into remarks. CRMLS asks members to label altered photos and to place the unaltered version immediately before or after the altered one, and it publishes that guidance for members.
Labeling does not require removing anything. The altered photo can stay in the listing once it carries the disclosure.
How the Same Test Applies to Listing Video
Video meets the alteration standard when the same kind of change is made. Digitally furnishing an empty room in a walkthrough, removing an object from the frame, replacing the view through a window, or generating a room that was never filmed all change what the property looks like.
Simulated motion is the case agents ask about most. Simulated motion is movement created by software rather than captured by a camera, such as a still photo animated into a pan or a generated flythrough of a space. Where it changes how the property appears, it meets the standard.
Some treatments do not meet it. Music, cuts between clips, captions, recorded voiceover, and color grading do not change the property itself.
Applying the test to video is an application of the alteration standard rather than a citation to statute, since the statute is written about images.
How to Raise This With the Seller First
Sellers usually hear a label as a warning. It reads to them as a signal that something is being hidden, when it is a routine notice.
Raise it at the listing appointment, before photography is ordered. The conversation is short at that point and awkward later, once the photos are back and the seller has already seen the staged version.
A plain version works. “We are going to virtually stage two rooms. The rules here require that we mark those photos as digitally altered and post the originals alongside them. Buyers see both, which is what keeps the showing from being a letdown.”
What varies is seller expectation by price point, so the same explanation lands differently across markets.
The Three Rule Sets Above You
Three rule sets apply at once. State law, the MLS rule, and brokerage policy. Where they differ, the strictest one governs.
The common mistake is following the loosest of the three. An MLS that has not written a rule does not cancel a state statute, and a state without a statute does not cancel a brokerage policy.
A listing photo travels further than the MLS. It syndicates to portals, appears on brokerage and agent sites, and gets copied into social posts, which is how a listing photo travels through syndication.
Rules vary by market, so confirm the current requirement with your broker before the first listing of the year.
What Agents Also Ask
Do I have to disclose virtual staging?
Virtual staging adds furniture that is not in the room, which changes what a buyer would see standing there. It meets the alteration standard, so the image carries a label and the original photo has to be reachable.
Does color correction count as a digitally altered image?
Routine corrections present the same property more accurately rather than changing it. Exposure, white balance, cropping, and straightening all fall outside the disclosure requirement, provided the property itself still appears as it does in person.
Where does the disclosure label go on a listing photo?
Placement is on the image or in the caption attached to it, so a buyer scrolling photos sees it without opening another screen. Wording such as digitally altered or virtually staged is what most MLS rules recognize.
Does AI listing video need a disclosure too?
Video is treated under the same test as photography. Where an edit changes what the property looks like, the disclosure applies. Music, captions, and cuts between clips do not change the property, so they fall outside it.
Why This Matters
Disclosure duties for altered listing media sit in three places at once, and the brokerage layer can be stricter than either one, which puts brokerage policy inside the listing decision. At eXp Realty, all agents receive the same core brokerage platform, including compliance, compensation, and access to company divisions. What differs is the sponsor ecosystem an agent aligns with.
The sponsor an agent selects shapes which tools, training, and attraction systems they have access to, including whether altered image standards are written down and taught before a listing goes live. Agents should settle that policy before the first altered photo is uploaded, and can weigh the Smart Agent Alliance team value when comparing where that support already exists.
