Key facts
- Organized real estate is urged to lobby for 'licensee-in-the-loop' AI laws.
- Unlicensed agentic AI systems are seen as a threat to licensed real estate professionals.
- Human oversight is deemed a legal and ethical necessity for fiduciary professions like real estate.
- NAR's current strategy of focusing on federal preemption is criticized as ineffective.
- State associations are called upon to lead legislative efforts at the state level.
- Legislation should mandate that AI performing licensed real estate activity must be legally tethered to a licensed human practitioner.
A software engineer and real estate broker argues that the National Association of Realtors (NAR) and its state associations are failing to proactively shape policy around artificial intelligence, leaving the industry vulnerable to unlicensed agentic AI systems. The author, Dmitriy Kruglyak, criticizes the current approach of 'monitoring' tech developments and focusing on liability safe harbors, stating that organized real estate is outmatched by the tech lobby.
Kruglyak emphasizes that real estate transactions involve fiduciary duties and life-changing financial decisions, which generative AI, due to its probabilistic nature, cannot reliably handle alone. He quotes AI safety expert Gary Marcus, who stated, 'We cannot allow mission-critical industries to outsource consumer protection to generative AI, which simply is not reliable enough. Human-in-the-loop oversight is a legal and ethical necessity.'
The author advocates for 'licensee-in-the-loop' legislation, which would legally require a licensed human practitioner to review, approve, and sign off on any real estate licensed activity performed by an autonomous software system or agentic AI bot. This human licensee would retain full, non-delegable legal and fiduciary accountability. Kruglyak argues that this approach must be driven at the state level, as real estate licensing and consumer protection are state-based powers, and a federal-only strategy creates dangerous loopholes.
He calls on trade associations to return to their core mandate of protecting the public and to spearhead legislative efforts with strict statutory penalties and enforcement programs against unaccountable AI platforms.