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Zillow faces lawsuit over ‘Zestimate’ tool that calculates a house’s worth

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Re: Zillow faces lawsuit over ‘Zestimate’ tool that calculates a house’s worth

#221

Post by _pmf_ »

michaelmrose wrote: post #194
ccvannorman wrote: post #176

Earlier quoted context omitted.

If true and you can prove it, this may be valuable information in prosecuting Zillow for some pretty illegal and perverted stuff. I hope you will share this information with someone who can punish Zillow for this.

Punish zillow for what? Seems to be a confusion between something would benefit me/may harm me and the other side having any sort of obligation to consider your position. An inaccurate estimate from someone who you paid nothing and whom owes you nothing may make your life more difficult but this doesn't imply they owe you anything.

Market manipulation is illegal. Whether or not there's a business relation between buyer and Zillow or seller and Zillow is immaterial. All the DA needs is an initial suspicion that someone related to Zillow profited from the manipulation.

Re: Zillow faces lawsuit over ‘Zestimate’ tool that calculates a house’s worth

#222

Post by chii »

allenbrunson wrote: post #132
strictnein wrote: post #111

Earlier quoted context omitted.

[1] reminds of an interview with the founder of Ashley Madison. He was going on and on about how western cultures were so regressive and prude about adultery and sex in general. The interviewer then asked him if he had ever used his own service. This elicited an uncomfortable non-answer that basically boiled down to "No".

"non-answers" are never good, of course, but i can easily see a way he could give a workable answer to that question. for example, he could say that some people are trapped in loveless marriages they can't get out of, but he never has been, so he's not the target customer. of course i'm just playing devil's advocate, because all evidence points to ashley madison being a scam, with essentially no women on the site.

> with essentially no women on the site.

I would have thought that some gold diggers would sign up for that sweet mistress money!

Re: Zillow faces lawsuit over ‘Zestimate’ tool that calculates a house’s worth

#223

Post by dagw »

cletus wrote: post #126
strictnein wrote: post #19

The Zillow estimate used to be spot on in our neighborhood, for several years even. Recently they all plunged to 10-20% below market value, even though all sales data puts it at the previous mark. The weird thing is that they also went back and recalculated old "Zestimate" data as well. On April 2nd the estimate for our house was $617,453, which is more or less what it would sell for. It had been above $600k since Ju…

I just went and tried this. The Zestimate for my place is... ludicrous. Probably 30% below market value. What's more, similarly sized apartments on the same floor vary by 15%! I'd always thought this number was dumb but wow. This is even more ludicrous than I could've believed. How can it be this far off with apartments with recent sales history in a building with lots of unit (and thus lots of sales activity)? Could…

similarly sized apartments on the same floor vary by 15%

Is that so unreasonable. In the building I used to live in for example the apartments on one side of the house had a beautiful view from the balcony and the ones on the other side didn't. The view side apartments consistently sold for more. I've also looked at apartment buildings where the floor size is basically them same for two apartments, but the layout was different, and people where willing to pay more for the apartments with the better layout.

Re: Zillow faces lawsuit over ‘Zestimate’ tool that calculates a house’s worth

#224

Post by chii »

vacri wrote: post #215

Here in Australia, underestimating by realty companies is the norm. I watched a friend go through buying a house last year, and some houses were advertised at prices that were below reserve [1]. As in, at auction, the bidding reached the advertised price, but the buyer's floor price hadn't been reached yet, so the house was not 'on the market' yet... [1] In one case, 80k below reserve. You know you've hit the reserve…

why don't they just say what the seller's floor price is, and start from there? seems foolish to auction at a starting price that's lower!

Re: Zillow faces lawsuit over ‘Zestimate’ tool that calculates a house’s worth

#225

Post by digitalpacman »

Thing is, all appraisers do a bad job. Evaluating a house is completely up to their opinion, and the artificially increase prices just because houses are selling. They drive prices up and down based no their will. Couldn't their job be legitimately done by a computer and a camera? Probably if the technology was there.

Re: Zillow faces lawsuit over ‘Zestimate’ tool that calculates a house’s worth

#226

Post by morganvachon »

I've mentioned it before on HN, but Zillow is vastly overvaluing my home. I paid $43k for it as a foreclosure in 2009. Today it appraises for about $60k (it's a tiny farmhouse on a half acre lot), yet Zillow constantly values it at over $80k. I believe they do this so they can bring up the average price for the houses in my area. Maybe it's good for me, I don't know, but it's dishonest.

Re: Zillow faces lawsuit over ‘Zestimate’ tool that calculates a house’s worth

#227

Post by SeanDav »

michaelmrose wrote: post #211
wyattpeak wrote: post #206

Earlier quoted context omitted.

There's a difference between an opinion proffered by a neighbour and an opinion from a large real-estate company. The reality is people do trust the site, so law should take that into account. If a situation is making life harder for actual people, the fact that their behaviour isn't economically rational is not a good enough reason to ignore the problem.

Zillow is a information company providing a free ballpark estimate of a vast array of properties, not a real estate company. This is an important distinction. Neither party is paying them for an accurate estimate ergo they are not obligated to provide an estimate sufficient for either buyer or seller, which is why both sides are best advised to PAY for an accurate estimate before closing a transactions worth hundreds…

Zillow, should make it very clear then that their estimates are complete works of fiction and any resemblance to actual value is purely coincidental and unintended.

Re: Zillow faces lawsuit over ‘Zestimate’ tool that calculates a house’s worth

#228

Post by runholm »

devoply wrote: post #186
cmurphycode wrote: post #175

Earlier quoted context omitted.

I know it seems weird to have the "old" data change. But, it's not observed data, it's estimates made at a point in time. The estimate comes from the property itself as well as the algorithm. If they changed the algorithm, do you think it would be better to recalculate the old values, or show a huge swing in your home value, implying some sort of market trend or issue with your house? If I were implementing it, I thi…

They should be more transparent about their algo though. That would then allow users to actually know how they came to the conclusion that they did. Hopefully this lawsuit will reveal that algo.

Their algorithm is the very core of the Zestimate product. The value of the IP is incredibly important for the company, and they would be very stupid to reveal any details of its inner workings.

Re: Zillow faces lawsuit over ‘Zestimate’ tool that calculates a house’s worth

#229

Post by lilbobbytables »

michaelmrose wrote: post #211
wyattpeak wrote: post #206

Earlier quoted context omitted.

There's a difference between an opinion proffered by a neighbour and an opinion from a large real-estate company. The reality is people do trust the site, so law should take that into account. If a situation is making life harder for actual people, the fact that their behaviour isn't economically rational is not a good enough reason to ignore the problem.

Zillow is a information company providing a free ballpark estimate of a vast array of properties, not a real estate company. This is an important distinction. Neither party is paying them for an accurate estimate ergo they are not obligated to provide an estimate sufficient for either buyer or seller, which is why both sides are best advised to PAY for an accurate estimate before closing a transactions worth hundreds…

If it was a buyer bringing the law suit, I'd be much quicker to call them a fool.

However, it's a seller. And the seller is annoyed because Zillow has a very strong influence over foolish buyers.

Zillow tells you that it isn't an official appraisal, but then they tell you to "Use it as a starting point to determine a home's value."

In my anecdotal experience, I've noticed that people pay attention to the Zestimate, and will make decisions based on it.

Should the seller win or lose? I don't know. But I understand why they brought the lawsuit, and I don't think it's particularly unreasonable.

Re: Zillow faces lawsuit over ‘Zestimate’ tool that calculates a house’s worth

#230

Post by blocacres »

simonhughes22 wrote: post #166

I have had both our homes (we rent one out) independently estimated and both are worth 25-30% more than the Zestimate. I live in IL like the realtor in the article. Zillow is consistently lower than other sites. The most accurate estimates for our home are on Redfin, which is almost perfectly inline with the appraiser's estimates. Zillow has a pretty overfit model IMO.

This is the flaw here. The seller, real estate agent, banker, and appraiser all have incentives to raise the price of the home. The only person in the transaction who doesn't is the buyer. I've been working on something in this area as a side project, and have been working with the fallout of 2008 in my day job, since 2008... and it continues to this day and the lack of understanding of the incentives here is the main issue. If Zillow wanted to gain customers through their zestimates they would raise the estimate not lower it. After all, more people own homes then are buying one in any given moment. Telling those people how smart they are that they timed the market is a much better way to retain users.
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