An Illinois homeowner has filed a lawsuit against Zillow claiming that its Zestimate tool has repeatedly undervalued her property and hinder its sale. According to a report in the Washington Post; the lawsuit may be the first of its kind and alleges that despite Zillow’s denial that Zestimates constitute “appraisals,” the fact that they offer market-value estimates and “are promoted as a tool for potential buyers to use in assessing [the]market value of a given property,” shows that they meet the definition of an appraisal under state law. The suit alleges that Zillow should be licensed to perform appraisals before offering such estimates and obtain “the consent of the homeowner” before posting them online.
“In the suit, Andersen said that she has been trying to sell her townhouse, which overlooks a golf course and is in a prime location, for $626,000 — roughly what she paid for it in 2009. Houses directly across the street but with greater square footage sell for $100,000 more, according to her court filing.”
A spokeswoman for Zillow reportedly dismissed the allegations as “without merit.” Their website says flat out that the Zestimate is “Zillow’s estimated market value for an individual home and is calculated for about 100 million homes nationwide.” They say it is only “a starting point in determining a home’s value and is not an official appraisal.” Indeed….it’ll be interesting to see how this plays out.
Click here to read the full story at the Washington Post.