Q: We represent a Seller of a vacant unit in a Common Interest Development. I recommended using a stager but the Seller will not pay a stager and I cannot afford to help the Seller. I was recently approached by a company that provides “virtual” staging. According to their promotional material, to aid real estate professionals market vacant, unfurnished residences they use computer programs originally created for interior designers to showcase what rooms would look like when properly furnished. Before I recommend this cost-effective technique to my Seller, are there any issues of concern for my brokerage and/or the Seller? Should we use any type of disclaimer?
A: Computer-generated staging, like any other type of computer-generated imaging (“CGI”), may be a more cost-effective means of staging vacant, unfurnished properties; however, there may also be some potential liability for false advertising when using this type of technology. Real estate professionals who are recommending use of this technology should take precautions to avoid creating unnecessary risks.
The primary concern of “virtual staging” is that CGI (with or without the aid of their human operators) can manipulate the size of the furniture and/or the size of the room to give a false impression of the relative size of the available space. Care must be taken when working with CGI vendors that they understand it is important that they avoid using techniques that will give any false impressions to potential purchasers.
Even staging with real furnishings can create some risk. Brokers and Sellers have been accused of adding furniture, drapes and/or rugs to diminish or conceal property defects. That type of claim will be more likely to occur with CGI since it is difficult to look behind the added imagery.
Another concern is that the Buyer may not understand that the furniture is not available for sale.
BEST PRACTICES TIPS:
- If a Broker chooses to use CGI, we recommend that the following CGI Disclaimer be inserted in a prominent place next to the pictures showing the digitally-staged room(s):
“Furnishings shown are computer-generated images created by an outside source. These images may not accurately depict the true scale of the space and are not included in the sale. Neither Seller nor Listing Broker has or will investigate or verify the accuracy of the relative scale of the furnishings and/or the space in these images.”
- As is true with all other photographs, videos and images used for marketing purposes, you should have a written agreement in place securing authority to use the pictures from the creator of the CGI. An excellent means of doing that is to use the C.A.R. Property Images Agreement (CAR zipForm “PIA” 12/17) which will be discussed further in an upcoming Weekly Practice Tip. In the third paragraph regarding Specifications are two blank lines to set forth additional requirements. Consider adding to that Section:
“Photographer understands, acknowledges and agrees that it is important that Photographer not use any computer-generated techniques that might create false impressions.”
- Consider showing photographs of the space without the CGI along with the CGI photographs so as to avoid claims that the CGI is being used to hide the “red flags” of a defect.
- Whether or not the Buyers have an opportunity to see the Property prior to making an offer, consider having them acknowledge receipt of a copy of the CGI advertisement so as to establish that they did, in fact, see the CGI Disclaimer above. One means of accomplishing that best practice is to attach a copy of the advertisement to the Listing Agent’s Agent Visual Inspection Disclosure (AVID) and include in the Other Section:
“Buyer acknowledges receipt of the attached advertisement for the Property which included computer-generated images. Buyer understands and acknowledges the Disclaimer included in that advertisement.”
DO NOT FORWARD TO CLIENTS. This Weekly Practice Tip is for the exclusive use of clients of Broker Risk Management and their agents. It may not be reproduced or distributed without the express written consent of Broker Risk Management. The advice and recommendations contained herein are not necessarily indicative of standards of care in the industry, but rather are intended to suggest good risk management practices.
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