AI is useful, but it’s far from perfect. Here are five common questions buyer clients ask agents, incorrect responses from ChatGPT, plus the correct response agents should use to avoid litigation.

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A recent Inman article argued that AI answers to “the easy lead qualifying and simple Q and A solutions are a far more accurate, dependable and inexpensive alternative to 1099 desk, chat and phone staff.” In reality, nothing could be further from the truth.

Agency and property disclosures are the two primary sources of major residential real estate litigation in the U.S. Unfortunately, buyers and sellers will increasingly rely on AI for these types of answers. Rather than making our disclosure obligations easier, AI answers that are riddled with misinformation will make them infinitely more difficult. 

Here are the first five of 10 common questions clients ask agents, incorrect responses from ChatGPT, plus the correct response agents should use to avoid litigation. To be fair, ChatGPT does give partially correct advice, but in each example below, the correct advice was coupled with incorrect advice that could lead to litigation. 

What is the condition of the property?

ChatGPT: If the agent has personally viewed the property, they can describe any visible defects or issues that they have noticed, such as signs of wear and tear, damage, or needed repairs. They can also provide information on the age and condition of major systems and components, such as the roof, HVAC, electrical, plumbing and appliances.

Correct response: When buyers inquire about the condition of the property, the only correct answer is to advise them to hire their own inspector and to do their own due diligence. Under no circumstances should agents try to evaluate any of the home’s systems or components, nor should they attempt to determine and age and condition of those systems. 

What are the average closing costs and how much should I expect to pay? 

ChatGPT: For a homebuyer, typical closing costs may include fees for the mortgage loan, such as application fees, appraisal fees, and loan origination fees. Other costs may include title search and insurance fees, survey fees, property taxes and homeowner’s insurance. On average, buyers can expect to pay between $3,000 and $7,500 in closing costs.

For a home seller, typical closing costs may include fees for the real estate agent, title search and insurance fees, transfer taxes and attorney fees. On average, sellers can expect to pay between 1 percent and 3 percent of the sale price of the home in closing costs.

Correct response: ChatGPT correctly states what types of fees are included in the closing costs for the buyer, but as soon as it veers off into stating the potential amounts of closing costs, it’s now providing the consumer and agent with information that is highly regulated by TRID (TILA-RESPA Integrated Disclosures). TRID was implemented in 2015 with the purpose of “harmonizing the Real Estate Settlement Procedures Act (RESPA) and Truth in Lending Act (TILA) disclosures and regulations.” 

Instead, agents should advise their clients that they will receive an estimate of the mortgage and closing costs from the escrow company, title company or lender that follows the established TRID guidelines. 

Where GPT gets it entirely wrong is stating that the 1 percent to 3 percent covers both the Realtor fees and the closing costs. This is an egregious error. The correct statement is, “Sellers can expect to pay an additional 1 percent to 3 percent in closing costs over and above the amount they pay in commission.”

How should Realtors advise their buyers if the buyer wants to back out of their deal?

ChatGPT: If a buyer wants to back out of a deal, it is the Realtor’s responsibility to advise them on the legal and financial consequences of doing so.

Correct response: This is another egregious error. Realtors cannot give legal advice, nor can they comment on the financial consequences of canceling a transaction. The best course of action is for the agent to turn this over to their manager, broker or broker-owner who can consult with the firm’s attorney on the specifics involved in each particular case. 

ChatGPT did correctly suggest one other thing the Realtor can do: “Explore alternatives such as renegotiating terms of the contract.” Nevertheless, it followed that advice with another error: That the buyer’s agent should consider finding, “a new buyer to take over the deal.” 

What is the neighborhood like? 

ChatGPT: The Realtor should provide a detailed response that covers all the important factors that the buyer is likely to be interested in, such as the safety of the area, local amenities, public transportation and property values. The Realtor should also use data and statistics to support their response such as crime rates, school ratings and property appreciation rates. 

Correct response: There are multiple issues with the GPT statement above including advising the Realtor to discuss the safety of the area, crime rates, school ratings and property appreciation rates. A primary danger here is violating Fair Housing laws prohibiting “steering.” According to NAR:

“Steering” under the Fair Housing Act is the process of influencing a buyer’s choice of communities based upon the buyer’s race, color, religion, gender, disability, familial status, or national origin. Steering on the basis of any of the characteristics defined under the Fair Housing Act is not only unethical, it’s illegal because it limits the housing opportunities available to that buyer. 

If an agent expresses his or her own positive or negative views about certain communities or schools, the purpose of which is to direct a buyer either towards or away from a community, then that agent may be stating a housing preference based on race or familial status or religion. These would be violations of the Fair Housing Act and of the Realtors Code of Ethics.

Nowhere is this more of an issue than when the question of schools comes up during the homebuyer search. Discussions about schools can raise questions about steering if there is a correlation between the quality of the schools and neighborhood racial composition — or if characterizations such as “a school with low test scores” or “a community with declining schools” become code words for racial or other differences in the community.

What you can do is provide your buyers with a report from (Realtors Property Resource) that provides not only neighborhood information, but the latest statistics on recent sales as well as where the market is currently trending. A second site is Attom Data’s which provides a wealth of additional data. Both sites are free to Realtors. 

How should Realtors respond when their buyer asks, “What kind of mortgage options are available to me?” 

ChatGPT did correctly advise, “Encourage the buyer to get pre-approved by a lender before making an offer on the property.” It should have stopped there. 

Instead, ChatGPT advised the agent to:  

Gather information about the various types of mortgages available and to discuss the pros and cons of each type of mortgage taking into consideration the buyers’ credit score and debt ratios. 

Correct response:  Agents have no business discussing pros and cons of the various types of financing, nor are they authorized to obtain and discuss credit scores or debt ratios.  They can tell their clients that there are fixed and adjustable-rate mortgages, low down payment loans such as FHA, USDA and VA, and that down payment assistance is available for qualified buyers. Any discussion of these programs, however, should be left to a mortgage professional. 

The best course of action is to have all buyers pre-qualified prior to taking them out to look at properties. Also, if you refer your buyers to a lender affiliated with your brokerage, be sure to make the appropriate affiliate disclosures to the buyer. 

ChatGPT is not only loaded with minefields for buyers, but for sellers as well. Watch for part 2 to learn about the questions and challenges that GPT and other AI chabots pose for sellers and listing agents. 

Bernice Ross, president and CEO of BrokerageUP and, is a national speaker, author and trainer with more than 1,000 published articles. Learn about her broker/manager training programs designed for women, by women, at and her new agent sales training at

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