TL;DR
What is California AB 723?
California AB 723 is a consumer protection law requiring real estate professionals to clearly disclose when listing photos have been digitally altered in a way that could materially mislead a buyer. That includes virtual staging or the removal/addition of permanent features.
The law focuses on transparency when edits change a buyer's understanding of the property's condition, features, or surroundings.
Reference sources: California Assembly Bill 723
Our Take at Bounti
- Transparency is not optional - it's strategic.
- AI enhancements should elevate imagination, not fabricate reality.
- Clear disclosure builds long-term trust with buyers.
- This is likely the first wave of AI-era regulation. More will follow.
- Agents who lead with clarity will outperform those who try to “blend” edits.
We don't see AB 723 as anti-AI.
We see it as pro-trust.
What Actually Changed?
AB 723 applies when edits materially alter a buyer's perception of a property. Specifically, changes to:
- Condition of the property
- Features present or absent
- Structural elements (walls, ceilings, fixtures)
- Permanent surroundings (views, neighboring structures, landscape)
Requires Disclosure
- Virtual staging (adding furniture, decor that doesn't exist)
- Removing permanent features (power lines, cracks, neighboring buildings)
- Adding design elements that aren't physically present
- Major visual enhancements that change a buyer's understanding of the space
Does NOT Require Disclosure
- Brightness and exposure adjustments
- Minor color correction
- Cropping
- Standard photo processing that doesn't alter perception of the property
“The goal isn't to stop marketing. It's to stop misleading marketing.”
Why This Matters (Beyond Compliance)
We've all been there. A buyer walks into a property and the first words out of their mouth:
“Wait... this didn't look like this online.”
That moment kills deals. It kills trust. And it gives the entire industry a reputation problem.
Trust is currency in real estate. Always has been. AB 723 doesn't invent that idea. It formalizes what buyers already expect: honesty about what they're looking at.
Transparency Is Now a Marketing Strategy
The agents who disclose proactively aren't losing deals. They're building reputations. When you tell a buyer “this image is virtually staged to show potential,” you're not hedging. You're positioning yourself as the professional in the room.
That's not compliance. That's competitive advantage.
The Bounti POV
Let's keep it simple:
- AI is not the problem.
- Deception is.
- Transparency wins long-term.
Virtual staging is powerful. It helps buyers visualize potential, fall in love with spaces, and make faster decisions. That's a good thing.
Fabricating structural reality? Removing cracks in a foundation? Erasing a cell tower from the backyard view? That's not marketing. That's misrepresentation.
AB 723 doesn't kill creativity. It professionalizes it.
What This Means for Bounti Users
We're not scrambling to catch up. We've been building toward this from day one. Here's what Bounti users get:
- Clear labeling on all altered images
- Built-in AI Disclaimer that stamps “Generated with AI” directly on your exports, so disclosure is automatic
- Tools with built-in guidance that keep you compliant without slowing you down
- Education and resources on evolving regulations
“Confidence > concealment.”
When your tools do the compliance work for you, you get to focus on what actually matters: creating stunning, honest visuals that sell homes.
Zooming Out
California isn't going to be the only state with a law like this. The pattern is clear:
- More states will introduce similar disclosure requirements
- MLS rules will evolve to match regulatory expectations
- Consumer expectations around AI transparency will only tighten
- NAR and state associations will issue updated guidelines
The teams and platforms that treat this as an opportunity, not a burden, will be the ones still standing in five years. Bounti is building for that future, not reacting to it.
The Bottom Line
AB 723 isn't anti-AI.
It's anti-misleading.
If your marketing makes properties clearer, more inspiring, and more transparent, you're not just compliant.
You're ahead.
Frequently Asked Questions
What is AB 723?
AB 723 is a California law requiring real estate professionals to disclose when listing photos have been digitally altered in ways that could materially mislead a buyer about the property's condition, features, or surroundings. It targets virtual staging, feature removal, and other significant visual edits, not routine photo processing.
Does virtual staging require disclosure in California?
Yes. Under AB 723, virtual staging qualifies as a digital alteration that could materially affect a buyer's perception of the property. If you add furniture, decor, or design elements that don't physically exist, you need to disclose it. The good news: a simple, clear label is all it takes.
What counts as digitally altered under AB 723?
Any edit that changes a buyer's understanding of the property's actual condition, features, or permanent surroundings. This includes virtual staging, removing structural defects, adding non-existent features, or altering views. Standard photo processing like brightness, exposure, and color correction does not qualify.
Does color correction require disclosure?
No. Routine photo adjustments like brightness, exposure, white balance, and minor color correction are standard industry practices and do not require disclosure under AB 723. The law targets edits that materially mislead, not standard photographic processing.