NAR Warns Realtors of Rising Risks: Fraud, Lawsuits, and AI Challenges Ahead – Sunday, November 16, 2025

The National Association of Realtors (NAR) has spotlighted emerging risks for real estate professionals, including fraud, lawsuits, and AI-related challenges, urging the industry to adapt swiftly to these evolving threats.

Main Story

The National Association of Realtors (NAR) has recently highlighted a series of pressing risks that are reshaping the landscape for real estate professionals. Among these, fraud and lawsuits have emerged as significant concerns, with the potential to severely impact the careers and reputations of agents. Additionally, the improper use of artificial intelligence (AI) in real estate transactions has introduced a new layer of complexity and risk. As the industry increasingly integrates AI tools to enhance efficiency, the potential for missteps grows, making it crucial for agents to stay informed and vigilant. Fraud remains a persistent threat, with scammers employing increasingly sophisticated tactics to exploit real estate transactions. According to NAR, realtors must be particularly wary of wire fraud schemes, which have been on the rise. In 2024 alone, the FBI reported over $220 million lost to real estate fraud in the United States. This staggering number underscores the necessity for real estate professionals to implement robust verification processes and educate clients on safe transaction practices. Lawsuits are another growing concern, as buyers and sellers become more litigious. Real estate transactions often involve complex legal documents and significant financial stakes, making them ripe for disputes. NAR advises its members to ensure thorough documentation and maintain clear communication with clients to mitigate the risk of legal action. An uptick in lawsuits could lead to increased insurance premiums and operational costs for agencies, emphasizing the need for proactive risk management. The integration of AI into real estate practices offers numerous benefits, such as enhanced data analysis and improved customer service. However, reliance on AI without proper oversight can lead to errors and ethical dilemmas. For instance, AI-driven property valuations might unintentionally perpetuate biases, leading to discriminatory practices. NAR has urged realtors to understand the capabilities and limitations of AI tools and to ensure their use aligns with legal and ethical standards.

Why It Matters

The evolving landscape of real estate, marked by technological advancements and heightened legal scrutiny, necessitates a strategic response from industry professionals. As AI becomes more prevalent, real estate agents must balance innovation with caution to avoid potential pitfalls. Failure to adapt could result in significant financial and reputational damage.

Key takeaways:

• Heightened risk of fraud and lawsuits demands increased vigilance and robust risk management strategies.
• Operational implications include the need for thorough documentation and client education to prevent legal disputes.
• Opportunities exist for realtors to leverage AI responsibly, enhancing services while ensuring compliance with ethical standards.

Sources: - National Association of Realtors (NAR) reports - FBI Internet Crime Complaint Center (IC3) data - Industry analysis on AI in real estate