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Zillow Faces Lawsuit Over 'Zestimate' Tool That Calculates a House's Worth (washingtonpost.com)
According to The Washington Post, "a homeowner has filed suit against online reality giant Zillow, claiming the company's controversial 'Zestimate' tool repeatedly undervalued her house, creating a 'tremendous road block' to its sale." From the report: The suit, which may be the first of its kind, was filed in Cook County Circuit Court by a Glenview, Ill., real estate lawyer, Barbara Andersen. The suit alleges that despite Zillow's denial that Zestimates constitute "appraisals," the fact that they offer market-value estimates and "are promoted as a tool for potential buyers to use in assessing [the] market value of a given property," shows that they meet the definition of an appraisal under state law. Not only should Zillow be licensed to perform appraisals before offering such estimates, the suit argues, but it also should obtain "the consent of the homeowner" before posting them online for everyone to see. In an interview, Andersen told me she is considering bringing the issue to the Illinois attorney general because it affects all property owners in the state. She has also been approached about turning the matter into a class action, which could touch millions of owners across the country. In the suit, Andersen said that she has been trying to sell her townhouse, which overlooks a golf course and is in a prime location, for $626,000 -- roughly what she paid for it in 2009. Houses directly across the street but with greater square footage sell for $100,000 more, according to her court filing. But Zillow's automated valuation system has apparently used sales of newly constructed houses from a different and less costly part of town as comparables in valuing her townhouse, she says. The most recent Zestimate is for $562,000. Andersen is seeking an injunction against Zillow and wants the company to either remove her Zestimate or amend it. For the time being, she is not seeking monetary damages, she told me.
They are a very crude tool using broad, flawed algorithms. If you want a real appraisal, hire an appraiser.
Real estate professionals know they are wrong but they will be happy to use them as an excuse to try to knock down the price of a house they are buying or pump up the price of a house they are selling.
I have no idea of their legal standing but it seems this suit is on shaky ground.
I don't read your sig. Why are you reading mine?
Take ownership of the property on Zillow and at least put in the correct details. Zillow doesn't even have the square footage of the apartment; of course it's Zestimate is going to be worthless. There are no details other than it is a 3 bedroom 3 bath townhouse. This is one dumb real estate agent.
-- All that is necessary for the triumph of evil is that good men do nothing. -- Edmund Burke
Or maybe people don't want to live in your neighborhood. Or maybe they earn $50k as an IT contractor in Silicon Valley and can't afford it.
1) I agree that Zillow is not accurate. It consistently mis-priced my condo for a long time. Among other things, it doesn't account for the quality of the interior at all. Nor does it properly take into account 'equivalents', which in NYC may be restricted to other condos in a specific building, and not include condos across the street.
2) I also agree that Zillow should have a better 'user complaint' form, specifically if a licensed appraiser submits a value, they should willingly replace their estimate with it.
3) But requiring them to be licensed is silly.
4) Also, no serious buyer would use the Zillow price rather than a price a Realtor suggested. Realtors know about the issues in #1 and account for it. At most you will be eliminating those people too cheap to use a realtor.
This is not going to reduce your price sold by more than 3%, and is unlikely to increase it either (unless you get someone not using a realtor who is also foolish enough to ignore the licensed appraisal.)
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