The American Real Estate Association (ARA) has launched an AI Task Force focused on advocating for and advancing “Licensee-in-the-Loop” legislation in all 50 states.
Jason Haber, a co-founder of ARA along with The Agency’s Mauricio Umansky, said the legislative effort was inspired by a contributor article published on HousingWire by Dmitriy Kruglyak, a self-described software engineer turned real estate broker. In the piece, Kruglyak argues that the growing use of agentic AI in real estate could put consumers at risk by allowing unlicensed automated systems to perform tasks traditionally handled by licensed agents, including negotiating contracts and guiding transactions.
“I think this could be the defining issue for our industry in 2027,” Haber told HousingWire. “I read Dmitry’s oped and I was glued. I immediately understood the implications of what he was writing about. It struck me as a gigantic red flag in our industry and no one was talking about it.”
AI Task Force
Haber said Kruglyak is now chairing ARA’s AI Task Force, which will be meeting for the first time in the coming weeks. The group will work on white papers focused on the issue, along with AI policy analysis and advocacy, with “licensee-in-the-loop” being the first issue the group will focus on.
“AI has no fiduciary, it holds no license, it has no errors and omission insurance and when something goes wrong, there is no real estate board to file an ethics complaint with,” Haber said. “So what happens is you have a consumer that has no idea how the AI model has been trained. For example, maybe it has been trained to benefit the seller and not the buyer so it convinces a buyer to make a higher offer.”
However, if a real estate licensee is involved, the whole situation changes, Haber said. ARA views “licensee-in-the-loop legislation as a guarantee that anyone who buys, sells or rents a home has a licensed, accountable real estate professional standing behind the transaction.
“We’re saying, if you have an act performed by an automated system on behalf of the consumer for a real estate transaction, it has to be supervised by a responsible licensee that’s identifiable to the consumer with a name and license. And, before any offer goes in or counter offers are transmitted, it’s really reviewed by someone who holds a license and that the autonomous system is backed by the licensees fiduciary responsibilities to a client,” Haber said.
Future proofing
He said ARA views this as the responsible way to embrace AI technology, as it enables consumers to hold someone accountable if something goes wrong in their transaction. Although the share of consumers buying or selling their home solely with the help of an AI model or an AI real estate agent product is still the minority, Haber said he believes the industry will see more of these AI real estate agent platforms popping up in the next year, which is why he feels it is important for ARA to get ahead of the issue.
“We are looking to future proof for the consumer in the industry,” he said. “We see this coming and we want to have regulatory and statutory framework in place so that we don’t have to react after the consumer has been harmed. So, we think by moving now we are in a better position.”
State-by-state effort
Haber also noted that these efforts take time, especially because there are no federal real estate licensing laws. Due to this, Haber said ARA is going state-by-state talking to legislators regarding this issue in hopes that they will be willing to introduce this legislation in their state.
“We are tapping our state association chairs and working with our federal lobbyist to connect us with elected officials around the country,” Haber said. “It is going to take some time and just getting one bill through one state is Herculean enough, but now we are trying to take this already very challenging thing and do it 50 times.”
While Haber acknowledges that this will be a tall order, he believes it is a great opportunity for ARA to show what it is doing to help agents and American consumers at a national level.
“I think it is going to be interesting to see how it plays out, it is a long process, but we think we will have legislation introduced as early as the end of the year or early January in some states,” Haber said.
