There is an interesting article in the Richmond Times Dispatch Metro Section today (5/15/17), “Zillow under scrutiny for ‘Zestimate’ system”, by Kenneth R. Harney. He notes a law suit filed in an Illinois court that claims Zillow’s Zestimate system has seriously undervalued a woman’s home, preventing her from selling it for what it’s worth. The article suggests that Zillow is not only responsible for stigmatizing her property, but furthermore begs the question of how can Zillow perform appraisals without a license? They are also making the value available to the public without owner consent.
Well, “it’s about time they got called on it”, said Pat Turner, a Richmond real estate appraiser quoted in the article. If, as the article mentions, Zillow’s information meets the definition of an “appraisal”, then why shouldn’t they be licensed to perform such tasks? Why shouldn’t they be held to the same high standards as the rest of those who are licensed professionals when performing these works? Why shouldn’t they be held accountable for their representation of a property’s value in the same stringent manner as are all licensed real estate appraisers? The penalty for providing inaccurate information and property value for a licensed appraiser is severe – Why shouldn’t Zillow have the same level of responsibility and accountability when posting information that the public so willingly seems to rely on when self-evaluating a home?
Is it because the information provided by Zillow is quick, easy, and free? Well then, one should not be surprised to get that they pay for. In the mean time, home owners who have a property for sale, like this woman in the article, may not be pleased to know that they, in many instances, may be penalized for the inaccurate information that Zillow is offering to consumers. Zillow is notoriously off-the-mark when it comes to appraised value, or the market value that can be offered by a licensed Realtor, and they freely admit it.
Zillow makes an incredible amount of money, hundreds of millions of dollars per year, by offering questionable housing valuations to the public via their “Zestimates”. Somehow, the consumer doesn’t seem to mind; at least until now. It will be worth watching to see if the courts take this action seriously. By all accounts, it seems to me as an educated consumer, that they should. The financial stakes are simply too high to be ignored. But beware; there are other AVM systems out there that will then also be under scrutiny, including those used by the government. It may be too late to put this animal back in its box!