A class action lawsuit against ZILLOW regarding the ZESTIMATE system that "supposedly" values assets! It's probably…
A class action lawsuit against ZILLOW regarding the ZESTIMATE system that "supposedly" values assets!
This probably had to happen: a class action lawsuit was filed against online real estate giant Zillow (and 5 other real estate sites), claiming that the company's controversial "Zestimate" tool consistently values homes below their true market value, which created " A huge roadblock ”for their sale by homeowners.
The lawsuit was filed in Cook County, Illinois. The lawsuit alleges that despite Zillow's denial that ZESTIMATE is an "appraisal", the fact that they themselves "promote it as a tool for potential buyers to use the asset market valuation" shows that they meet the definition of "appraisal" under state law. Not only must Zillow be required to obtain an appraisal license in order to make assessments before she publishes them, the prosecution argues, but she must obtain “landlord consent” before she can publish them online.
Zestimate's capabilities are fundamental to Zillow's business model as it attracts millions of home buyers to the site, enabling the company to sell advertising space to real estate agents. Zillow makes big money with its Zestimates: In the first quarter of this year, it reported revenue of $ 245.8 million - a 32 percent jump from the year before - including $ 175 million in payments from Premier agents, who pay for advertising on the site.
According to Zestimate, Zillow "is not an estimate", but is "Zillow's estimated market value" using its proprietary formula (an algorithm developed by Zillow). But there are serious problems as a result of Zestimate's error rate: in about a quarter of cases, their estimates are incorrectly 30 percent or more than the selling price, and incorrect in 20% or more in 10 percent of cases. A 10% error rate may sound modest, but when calculated as median sales, the errors can reach tens of thousands of dollars, hundreds of thousands in upscale areas.
Now ZESTIMATES are not enough for ZILLOW - they are now buying and selling properties. Zillow is no longer content with managing the online platform where there is contact between home buyers and sellers; It recently entered the buying and selling process itself through a venture it calls “Zillow Offers”. The company offers sellers to buy their homes immediately in the hope of making a profit in "FLIP" (quick sale) to buyers.
In fact, it offers sellers a cash deal and charges a fee in the range of 6% to 9% of their Zestimate. This means Zillow has an interest in valuing the homes they want to purchase at less market rates. This point was cited in the lawsuit as a significant conflict of interest.
The class action is expected to reach 300 million!
* The translation from the article with the help of American Eagle Investments.
The original responses to the post can be read at the bottom of the current post page on the site or in the link to a post on Facebook and of course you are invited to join the discussion
Benny Nahmani
* Important update *
The claim is from 2018
Since the appellate court has (insured) released the claim!
Read the reasons why:
https://cookcountyrecord.com/stories/511770943-appeals-panel-zillow-s-zestimate-online-home-value-estimations-just-opinion-not-illegal-appraisals
Finally! I really did not understand how an external site decides on my home and its value, a simple monopoly of a leading site, waiting to see what the prosecution will lead in the future because Redfin also have an estimate
It was obvious this would happen. They changed the price estimation system, including changing the history. Nothing like that.
Saar BamVadim Lichtik
Wow madly interesting.
We have always known that Zestimate is a dangerous and inaccurate tool.
Wonder how the lawsuit will end
A lot of work, thinking, investment and money around it
https://www.kaggle.com/c/zillow-prize-1/overview
In my opinion, what will happen to Zilo with the idea of becoming a realtor will end just like Facebook's idea of setting up a dating app and of Google to set up a social network.
It is a fatal mistake to rely on Zillow's assessment. Since Zilo is based on the actual sold price. So the price there doesn't reflect the actual price of a property like a property sold for no consideration, with debts, in a receivership process, requires renovation, at Short Sale they don't put it into consideration.
Very interesting… Can you share a link from the original article?
Tomer Raviel
* Important update *
The claim is from 2018
Since the appellate court has (insured) released the claim!
Read the reasons why:
https://cookcountyrecord.com/stories/511770943-appeals-panel-zillow-s-zestimate-online-home-value-estimations-just-opinion-not-illegal-appraisals
Danny Trestian
On Zillow's website they emphasize the error in calculations and claim that off-market houses are on average 7.5% of the real market value. Anyone interested can read more here https://www.zillow.com/zestimate/
By the way, Zillow Offers is a completely different animal. They employ local brokers, they do not offer the Zestimate purchase price but a real market price, usually lower, take a 7-12 percent transaction fee, lower an additional amount for renovations (minimum 8k but after inspection usually the number increases significantly) and close fast Cash. They let the seller close after two to 90 days from the inspection. Just before closing, they give a settlement statement that shows additional amounts that the seller pays.
They only do cosmetic renovations, usually only carpets and paint and thorough cleaning, selling through the local realtor at a reasonable market price. The business model is 4% profit but the real money is in selling leads to other brokers.
The deal is suitable for those who need to invest a lot in renovations before selling a property, those who need to sell fast, or who do not want to bring people home to show buyers the property. It's a terrible deal for a reasonable seller because they leave a lot of money on the table.
https://www.reuters.com/article/us-zillow-group-lawsuit/zillow-wins-dismissal-of-zestimate-lawsuit-in-u-s-idUSKCN1B32RN
Can I get an original link for advertising?
Creep copies all the information from realtor.com
Don't count on them ..
The most reliable
Realtor.com
An insolent company and probably the Association of Realtors in the United States will work to prevent Zillow from becoming an intermediary body..
David Yehonatan HazanRonen Hazan
Sounds a little weird to my taste. There will always be mistakes. Certainly when based on statistical algorithms. And of course human appraisers can also make mistakes and deceive. The question is of course whether there is an intention of "malice" in this case. For example if the company prices low to buy cheap… Will it change the pricing as soon as you want to sell? It seems less to me that this is the case but I would be happy if someone would add this information. Unfortunately or to our delight (depending on the different opinions) we will not be able to escape from sources of information of this kind. They have huge benefits for the consumer audience but of course they can also be “dangerous”… As long as there is no regulated regulation in the industry I would just look at them as “another” source of information for cross-referencing.
Enable source / story link?
Sean Rosenboim
David Bar Gil
Dudi Endy
Tal Saadon Noam Nahum
For those who do not know. It is possible to "control" Zestimate. All you have to do is "take over" a particular property page by clicking on the link are you the owner? And update the details of the property to the latest details
We always knew that their algorithm was not accurate, but now it seems that it is malicious and for their profit. wow
Wow crazy.
Dany Fishel Amit Batzir
Samuel Hazan
At least give credit to whoever you set it up….