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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?
Let me see, would that be Oculus?
To fix this, "take ownership" of your property on Zillow and edit the property details and add an extra 1,000 sqft to it. Magically your value will go up. Thats what I did 5 years ago!
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
1 Infinite Loop, Cupertino, CA 95014 3 beds 3 baths -- sqft Edit Edit home facts for a more accurate Zestimate. OFF MARKET Zestimate®: $1,840,871 Well. Very undervalued
I need a Sino-Logic 16. Sogo-7 data-gloves, a GPL stealth module...
i can't tell you how many times Wells Fargo in Nevada by using Zillow as a gauging instrument to say to me... refinance probably not a good idea. they were right when we in Washoe county was hit the hardest...and even 10 years later, just barely getting back to break-even... and i didn't even buy low.. i was on the up swing in 2004... so i did not buy high.. just about 50% up the bubble.. it will work out.. zillow is fun to try --- use the Make Me Move feature to help stimulate interest and market interest... it works.
I've never heard of Zestimate. I would give as much credibility to them as I would to an "anonymous coward".
A roommate and I rented the front unit of a triplex in Silicon Valley after the dot com bust. I had planted some petunias in the front yard, got busy with life, and let the petunias die. While we were out in front one day, a little old lady came up to tell us that the dead petunias in our front yard lowered the value of her house down the street by $25K. I asked her if she was selling her house. She said no. I asked her how she knew that the value of her house dropped by $25K if it wasn't up for sale. She walked away in a huff.
The "luxury" apartments in my immediate area have a 50% vacancy rate in San Jose. The last time this happened was after the dot com bust and the Great Recession. The apartment bubble might be easing as new apartments and condos are coming online. Or maybe Silicon Valley is slowing down.
...towards sellers, not buyers.
Time is what keeps everything from happening all at once.
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.
Or maybe people don't want to live in your neighborhood.
Or maybe all the cigarette and pot smokers moved out because federal law applies to the apartment complex and smokers have to go outside the gates to smoke.
Or maybe they earn $50k as an IT contractor in Silicon Valley and can't afford it.
For an extra $200 per month, I could get an additional wall to have a one-bedroom apartment.
I have a contract to sell on a house that Zillow lists for about there times what I was able to sell it for. Both Zillow and county appraisers don't take the condition of the property into account. Both mostly just use square footage and recent sales nearby. For a house built in 1973 and never updated or renovated (think plastic counter tops and pink tile in the bath) the actual price you can sell it for can be far lower than either of those "appraisals".
I disagree, especially once you take property tax valuation into account (which may also be higher than this ZEstimate thingy.)
Quo usque tandem abutere, Nimbus, patientia nostra?
Or maybe all the cigarette and pot smokers moved out because federal law applies to the apartment complex and smokers have to go outside the gates to smoke.
There is no such law. An apartment manager might tell you that just to get you to cooperate, but there's no actual law requiring that. However, as per the Fair Housing Act, if one tenant has breathing problems and another nearby tenant smokes, they can force the smoking tenant to move to another unit and/or move out of the complex entirely. If the landlord doesn't comply and doesn't forcibly move that tenant, they can get sued.
The apartment I used to live in had rules requiring that all smoking happen off premises, which was just their own bylaw that you had to agree to when you signed your lease. However, the one I live at now doesn't; they just have to be in certain designated areas.
No matter what though, in the event of any kind of dispute, the law (rightfully, IMO) tends to discriminate against the smoker's civil rights if they conflict with that of a nonsmoker's civil rights.
However, as per the Fair Housing Act, if one tenant has breathing problems and another nearby tenant smokes, they can force the smoking tenant to move to another unit and/or move out of the complex entirely.
What the situation could be since the apartment complex is covered by the Fair Housing Act (federal law), CA-legal pot smoking isn't allowed. If the pot smokers have to go outside the gates, the cigarette smokers have to go outside the gates as well.
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.)
excitingthingstodo.blogspot.com
The reality is that the entire market is comprised of numbers pulled out of the air. Therefore, suing Zillow for doing what the entire market is doing is completely bogus.
That said, I kind of hate how Kelly Blue Book dictates the price of the entire auto resale market, so yes, all appraisals should be abolished. It's hard to do though in a market of non-fungible items, like houses, where there is no fully objective way to compare one house to another.
There's also insurance issues.
Apartments that totally ban smoking get discounts on it, since they've banned a major source of fires.
Smoking bans are generally market based, not law based.
Wow, sent an e-mail as suggested when clicking on "use classic" banner, and got a fast response that addressed my msg
Zillow accounts for the interior to a point, as it recalibrates on past sales of a property (from what I can tell).
Now, a remodel since the last sale is ignored, but all of your other points still stand in that case. People look at what's available when they buy, and real estate actually functions as a decent market.
The person complaining probably has a shittier house than across the street of they can't sell it for the same price.
Home owners seem to completely over value their house on general.
Wow, sent an e-mail as suggested when clicking on "use classic" banner, and got a fast response that addressed my msg
It amazes me that someone didnt sue them years ago for this.
There's no way a website can generata an accurate estimate for your house, but people will beleive the figure they post or at least use it as a guideline so ts its inevitably gonna be harder to convince potential buyers that zillow in fact fucked up rather than you are overvaluing it.
I'd go as far as to say that their estimates are basically self-fulfilling prophecies that can easily hurt both buyers and sellers in the pocket by skewing the market value,
A much better way of doing this is to show sale prices of properties nearby, as the UK sites right move and Zoopla do. This way you can see which are roughly equivalent properties pretty quickly, then look on street view to refine your matches or even go and drive past in person.
Despite Zillow's little disclaimer, which is designed to make all liability magically disappear for them, they are liable for real damages to this person, in the exact way their lawyer stated.
Zestimates are pointless because everyone except for absolute newbies to the real estate market knows they are completely wrong. Newbies will rapidly become educated - no, sorry, that ramshackle house your mom willed to you in the wilds of some depressed former coal mining region isn't worth $750,000 when literally every other home being sold near there is going for 1/10th that.
Further, Zillow re-writes history when Zestimates change - there's an historical graph they have that doesn't remotely match what their Zestimate is - anyone who has tracked a place over time knows this.
They hurt Zillow because there is literally no reason to go to Zillow over any other real estate site - if you can't trust their numbers and see that they are willing to lie to try and cover up just how bad their numbers are, why not use someone else who at least doesn't do that?
Since I can't tell them apart, I treat all ACs as the same person.
The most important distinction being that a CMA is not an official determination of value, it's a non-binding estimate. Agents get mad at appraisers all the time for using properties they don't think are comparable when putting the appraisal together. Agents and appraisers both get mad at Zillow for using a pretty weak CMA algorithm. They both use tools that give them something like a Zillow estimate, but then dig into it manually.
She's blaming Zillow for her woes is she ? Zillow has some usefulness, but is far from a total ( or accurate ) picture of why a home price is what it is.
What's next ? Folks going to go after Edmunds True Car Value or Kelly Blue Book because they feel they're undervaluing their cars ? :|
It's a third party ESTIMATE based on an algorithm for fucks sake.
You want to know what counts ? The folks that actually appraise your home periodically to set your tax rate. ( I highly doubt they rely on Zillow data btw ) That's the only one that counts because that's the one the banks are going to use to determine the worth of a home when it comes time to lend money. You trying to sell your home for $800k, but it officially appraises at $500k ? Well, guess what. The bank isn't about to lend anyone $800k on that home. You want it ? You'll have to come up with the other $300k on your own.
Welcome to reality.
I can't speak for other areas / States, but where I live it's dead simple to pull up the official tax records ( they're online and public record ) on ANY home in the county to see what value it appraised at for the past decade. If you want to sell your home for near $650k, you damn well better make sure that it officially appraises close to that figure. Otherwise, you're just suffering from delusions of grandeur.
Also, no serious buyer would use the Zillow price rather than a price a Realtor suggested.
Realtors aren't any better. They exist to maximize their profits and minimize their costs. I have yet to meet a Realtor whose best interests align with mine. They're almost as bad as the Nigerian scammers, but not quite.
I have no idea how they calculate my home's value, but it's obviously not based on direct comps from recent sales around here. The square foot price that they're using is about 10% lower than what I would easily get. To be fair, home prices have risen by something like 30% in the last 3 years since I bought it, and it looks like zestimate doesn't handle this sort of market very well.
Do you have ESP?
Zillow blindly scrapes the sales info from county web sites and deed book. I was seriously looking to buy a condo in Florida. Curiously two condo units had double the value of all other identical units. Did some digging and found someone, likely an investment company, bought two condos in one deed. Zillow has happily assigned the total price to each condo!
sed -e 's/Chuck Norris/Rajnikant/g' joke > fact
What about website/domain name value estimators? They also pull a seemingly-random number out of a hat, disagreeing with each other by 1000% or more, and no doubt impact what a buyer is willing to pay. Yet it's hard to see how it would be in the public interest to outlaw all machine-generated estimates.
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Do they use them for AirBnB?
Funny you should mentioned that. My apartment complex announced that they have guest apartments available for short-term rentals. I don't think they're doing AirBnB yet.
I treat the Zillow estimate the same way as a budgetary quote for customers, it's+-30%. Using the 30% number her townhome fall's well within the range of the margin of error. If you want a real estimate pay to have a person to come look at your house and put a value on it, they are called restate agents.
There's a giant "I disagree with this Zestimate" right under the Zestimate. It allows you to offer a real appraisal (which generally costs money -- in Northern California it's around $400) through an agent.
And the Zestimate is going to go up and down, just like any other estimate. If the house next to yours sells for $100,000 less than you might have thought, your house will likely drop in value. Your house might sell for a lot more, but the value will drop regardless as neighborhoods count towards your appraisal.
But yes, the Zestimate is inaccurate at best. But then, most appraisals, even the $400 ones, are just best guesses -- they look at your house, comparable sales if any, the neighborhood trend. Our house was appraised at $30K more than we expected -- more than the realtor expected too (appraisals in NorCal are independent of realtors for obvious reasons). But this magically put us above water on the home and we were able to refinance -- just because of a best guess at the value of our house by a "professional".
By the time a house pops up on zillow its already sold, I know cause I was in them a week or more before. Their square footage is almost always wrong and their estimate's are just random guesses.
When I bought my house last year it took about a day of looking at zillow to know its absolute worthless bullshit
The last time I was looking at them, between '10 and '12, 100% of the time they *massively* OVERVALUED the properties, and sizes.
Data: my real estate agent Chicago (which, btw, is Cook Co), did her due dilligence in '03. Zillow claimed that, at the time, it was worth 20% more. They lied.
I looked at the house I bought in Montgomery Co, MD, in '11. They claimed it had something like 500^2 *more* than it does (and was worth more than I paid).
They're crooks. Refin, on the other hand, seems to give *reasonable* values, and correct square footage.
This suit should be thrown out at the preliminary hearing. Zillow is stating an opinion, and they have every right to do so.
-jcr
The only title of honor that a tyrant can grant is "Enemy of the State."
In my real estate market, I pay almost the same amount to buy as it would cost me to rent a house like mine.
LK
"Hi. This is my friend, Jack Shit, and you don't know him." - Lord Kano
Zillow showed my house as being worth so much that we started the paperwork with our mortgage broker to get cash out (we wanted to finish the basement). The mortgage broker confirmed Zillow's valuation as "a good faith estimate" but required an actual appraisal.. The official appraisal (which cost us $500) came back nearly half of what Zillow estimated, and based on how much we still owed we didn't qualify. I wanted to sue Zillow for their misleading estimate but thought that what they did wasn't actionable.
Hahahahahahahaha. A graduate in most fields are useless right out of school. There's people in Computer Science and Electrical Engineering who've never used a soldering iron.
"luxury" and "apartment" are mutually exclusive.