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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.
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.
To me this reads as a homeowner over valueing their home (I saw this a lot when shopping FSBO trying to save). The houses across the street are selling, this home owner is missing something about why theirs is not. They are blaming the zestimate instead. Just like when I was shopping, and people were comparing their house to slightly smaller but nicely remodeled homes to their old carpet sad kitchen ones.
Wow, sent an e-mail as suggested when clicking on "use classic" banner, and got a fast response that addressed my msg
No, the question is whether they should be regulated. Appraisals have specific regulations, so if people are using this service in lieu of actual appraisal services...
To me, this seems a bit like Uber claiming "we're not a taxi service" while blatantly offering a slightly different sort of taxi service. Just because they claim "this isn't an appraisal service" doesn't mean it actually *isn't* an appraisal service. They may end up winning if there's a legal definition of "appraisal" that they don't match, of course. I really don't know enough about appraisals or this case to have much of an opinion.
Irony: Agile development has too much intertia to be abandoned now.