Zillow Faces Lawsuits: According to an article in Crain’s Chicago Business, Zillow is under fire for misleading estimates on homes in Illinois. The homeowners claim that the inaccurately low values misleads potential buyers, who take the estimates as appraisals, even if Zillow claims they are not. Further, some sellers argue that a low estimate from Zillow has hurt the marketability of their homes.
Automated models of valuation are commonly used in other areas of real estate, particularly in financing and review of loans. But the power of a large brand such as Zillow means that consumers of its product may be easily confused by what the service provides. Of course, we recommend buyers and sellers hire an appraiser for any valuation needs.
Zillow states that its figures are merely estimates of value, not rigorous third-party appraisals performed by licenses professionals:
“We always say that the Zestimate isn’t an appraisal,” said Emily Heffter, a spokeswoman for Seattle-based Zillow. [A Zestimate] is a starting point that people can use when they’re working with a professional appraiser or a professional agent to determine the home’s value. While Zillow includes a page on its site that explains precisely how inaccurate its estimates are—in Chicago, the Zestimate comes within five percent of the eventual sale price just over 44 percent of the time—”the average consumer doesn’t see that,” said Peter Poulos, president of the Metron Group, a real estate appraisal firm based on the city’s Northwest Side.”
Zillow Faces Lawsuits: Zillow hit with class-action suit over ‘Zestimates’
The best way to determine the value of your home is to use a professional appraiser with expertise in your market. If you are located outside of the Phoenix metro area, we can put you in touch with an experienced professional in your area.
Contact the professionals at Arizona Appraisal Advisors today for an accurate valuation.