I’m strongly behind Zillow on this one.
Zillow.com, as you most likely know, is a website focused on real estate. Their big product right now is providing “Zestimates” to its visitors. These Zestimates try to estimate what your property might be worth, if you were to sell it, today. It uses publicly available information, including recent sales, etc. (and then creates “algorithms” from them).
Here’s the situation, in a nutshell (Part of my argument is based on a blog entry on Greg Swann’s BloodhoundBlog. I’ve included his argument in italics).
The National Community Reinvestment Coalition has filed an FTC complaint against Zillow.com, and it may yet file other complaints with other government agencies, notably HUD. The complaint consists of three bogus claims:
Bogus claim number one: Zillow results are fraudulent
This is ridiculous. Zillow’s “zestimates” (ugh) are just that – estimates.
I don’t have much faith in their numbers. As a consumer / homeowner, you are better served by going to your local county’s registry of deeds website and looking up a couple of recent sales, to get an idea of what your own property is worth.
Or, call a local real estate agent to create a comparative market analysis for you. He or she will do it for you, in about two hours, free of charge, and without obligation. It’ll be about as accurate.
Using Zillow can be fun. Not much else.
In this case, Zillow is guilty of hubris, not fraud. They say they are mostly accurate. That’s a stretch. It’s not illegal. Geez.
Bogus claim number two: Zillow.com is racist.
This is completely specious. The government-collected records Zillow.com works from do not contain any demographic information. The only way Zillow could escape its for evaluating homes (that may or may not be owned by members of Federal Fair Housing law protected categories) according to their assessed value and recent nearby sales would be by introducing demographic details into its algorithms. In other words, the only way Zillow.com can prove it is not being racist is by being racist!
Bogus claim number three: Members of Federal Fair Housing law protected categories are suffering financial losses due to the fraudulent use of Zillow.com Zestimates by unscrupulous lenders, Realtors or real estate investors.
Ridiculous. Zillow.com doesn’t have that kind of power or pull in the industry.
Based on a cursory examination of the history of the National Community Reinvestment Coalition, I believe their motivation is wholly mercenary. I think their purpose in leveling these charges against Zillow.com is to shake the company down for some kind of financial settlement, possibly disguised as re-education classes or a consulting contract. In any case, whatever their motivation might be, the charges they bring against Zillow.com are wholly specious and without merit. I might wish that Zillow.com would add the disclaimer language discussed above, but their not having done so is not fraudulent, is not racist, and is not larcenous.
I couldn’t have put it better myself.
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