Zillow home estimates are allegedly inaccurate

The National Community Reinvestment Coalition has filed a complaint with the FTC against Zillow stating that the company is misleading consumers and real estate professionals that rely on the accuracy of its home valuation service.

Zillow has created a lot of buzz around its home value estimation tool. I know a number of real estate agents that use Zillow’s valuation tool on a regular basis. And nearly all those agents heavily rely on the accuracy of the valuation. Therefore, if Zillow is in fact misleading people, this could become a major issue.

You can check out the complaint PDF here. [link]

In the complaint, the NCRC states that Zillow misrepresents itself as the Kelly Blue Book for homes. It also states that  Zillow misrepresents the accuracy percentage of its home estimates. According to Zillow, its estimates are with-in 10% of a home’s selling price. Unfortunately, many consumers do not realize that they should take any online home valuation tool’s estimate with a grain of salt. Zillow should maybe add a disclaimer for real estate professionals stating that its estimates may be inaccurate.

I do hope that Zillow gets out of this complaint. I really like Zillow’s website. It’s intuitive and easy to use. And even if the estimates are not completely accurate, at least it’s a place to start.

Zillow home estimates are allegedly inaccurate Comments

  1. Kevin Boer says:

    You’ve hit it right on the head — Zillow is a great place to start, but it’s not, and can’t be, the final arbiter of home values. The NCRC action is, in my view, nothing more than a classic find-the-deepest-pocket shakedown. What provoked the action was not that Zillow doesn’t have enough disclosures (I’m not sure _any_ number of disclosures would have been enough) but that Zillow has $60M+ in funding.

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