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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

#241

Post by 59nadir »

razwall wrote: post #149
jcranmer wrote: post #144

Earlier quoted context omitted.

Illinois is a common-law jursidiction. Any judge would laugh you out of court if you claimed an off-hand comment on valuation was an appraisal.

I agree. So where is the line between an "off-hand comment" that's not subject to the law, and an appraisal that constitutes a misdemeanor? Is it illegal if you post your comment on Facebook? Or on your blog where you talk about various homes for sale in your neighborhood? Or only when you start charging people money to hear your opinion? A citizen cannot look at the law and figure out if they're committing a crime,…

> A citizen cannot look at the law and figure out if they're committing a crime, which is why I said the law is unconstitutional.

Zillow is not a citizen.

They're also in the business of providing these numbers, which is obviously far from the same thing as making a comment while driving down a street. I think you're trying to blur a line that's pretty clear to most reasonable people.

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

#242

Post by gnicholas »

Mathnerd314 wrote: post #238
gnicholas wrote: post #218

Earlier quoted context omitted.

Good point. But what does "procurement" mean in this context? The plain meaning is "obtain", but that doesn't really make sense here. The word isn't used elsewhere in this document but is presumably defined somewhere. If it is interpreted to mean "use", then the case is a loser as you say. But I wouldn't want to be the lawyer tasked with arguing to the judge that "the legislature meant 'use' but decided to say 'procu…

Generally in law you use a law dictionary, e.g. http://thelawdictionary.org/procurement/ , which defines it as "the entire process of purchasing goods". "Entire" there suggests a broad term, hence interpreted inclusively in the context it appears. So in context it's probably something like "commercial use". But there are other questions of applicability, e.g. whether the legislature intended that sentence to only app…

In my experience (7 years as a corporate lawyer), a law dictionary would only be consulted for legal terms of art, which "procurement" is not. For most terms, a regular dictionary definition is used.

At any rate, I don't see how the definition cited would clear up the matter. It's a big leap from "the entire process of purchasing goods" to "commercial use". Like "use", which I discuss above, "commercial use" is a common term of art, and it would be strange to say "procurement" if what you mean is "commercial use".

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

#243

Post by gnicholas »

scott00 wrote: post #240
SolarNet wrote: post #219

Earlier quoted context omitted.

I'm not sure I understand your point. By visting the website one is procuring the estimate through an automated model in return for the ads and tracking you agree to by visting. Legal language is straight forward in this case.

Procuring an estimate produced by an automated valuation model is not quite the same thing as procuring an automated valuation model.

Exactly. It doesn't really make sense to talk about procurement of an automated valuation model, but that is what the statute seems to say.

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

#244

Post by djrogers »

mozumder wrote: post #128
beamatronic wrote: post #115

Earlier quoted context omitted.

With this [1] or this [2] [1] https://www.google.com/streetview/trekker/ [2] https://matterport.com/

How's that going to find rotting wood underneath the porch or a broken AC? You know, what inspectors actually do...

Inspectors and appraisers do different jobs - appraisers don't look for rotting wood, sometimes they don't even enter the home (i.e. if they know the trim level used for a particular development)..

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

#245

Post by djrogers »

_m8fo wrote: post #16

You would think real estate would prove to be one of the few real life fields where machine learning would be able to predict the prices pretty accurately. You have: 1. List price 2. "Favorites" on the MLS. 3. Square footage 4. Bedrooms 5. Bathrooms 6. Sold price for nearby properties 7. Sold price for nearby properties relative to their list price And the list goes on... Is it that difficult to predict? Literally th…

Aside from the long list of unobservable attributes your ML algorithm can't learn, the biggest problem would be the small size of the dataset available, especially in the hottest markets (few sellers).

Many neighborhoods (not cities, or zip codes - too much variance in god that large) have on the order of single digits a dozen sales per year, meaning that in some cases the most recent 'comps' can be a month or two old. In a fast rising or dropping market, there's nowhere near enough data to train an algorithm before the prices have changed again.

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

#246

Post by djrogers »

wuliwong wrote: post #83
mbroshi wrote: post #12

Earlier quoted context omitted.

This is from the article: "...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. Not only should Zillow be licensed to perform appraisals before offering such estimates" It can be surprising when seemingly innocuous activities are in fact heavi…

I don't believe the article is correct in the definition of appraisals. A valuation or an approximation of value by impartial, properly qualified persons; the process of determining the value of an asset or liability, which entails expert opinion rather than express commercial transactions. http://legal-dictionary.thefreedictionary.com/appraisal

The article doesn't have to be correct about the definition, it's about how Illinois regulations define it.

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

#247

Post by infinite8s »

tehlike wrote: post #178
WaxProlix wrote: post #148

Earlier quoted context omitted.

Even without revealing the highest offer, the offers themselves constitute a silent auction, which is where a lot of the information asymmetry comes from. If I could speak to each of the other people and tell them I had X amount to spend we could all agree to walk away or make offers without going through a bunch of hassle and (for 32 of 33 offerers) heartbreak. The process really highlights to me how broken certain…

What you are talking is second price auction. Winner gets the house, but pays the price of the runner-up. I wish this existed.

Why would a seller agree to this type of auction?

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

#248

Post by djrogers »

Jemaclus wrote: post #191
hbosch wrote: post #146

Earlier quoted context omitted.

A friend was looking at houses via Redfin. The agent told him on day 1 that he should expect to spend 10%–20% more than the online quote, as a rule of thumb. Since then I've taken "Zestimates" with ~65,000 to 100,000 grains of salt.

I used to work for Z, and I can confirm that the Zestimate is just that: an estimate. It doesn't know things like whether you did renovations or whether the house next door caught on fire and burned down and things like that. If something about your particular house changed in the last few years, the Zestimate is likely to be way off. That said, it's fairly good as far as comps go, and if you have an average house in…

> I was like... what? You listed for X, we offered X+100K, you don't get to counter that

Apparently they do, because...

>they wound up selling for 175K over asking price

And, as for this:

>Instead, we actually rely a lot on the Zestimate and Redfin's estimate to figure out what the "real" value of the house is

Let me give you a lesson from econ 101 - the 'real' value of something is whatever someone else is willing to pay for it. If multiple people are willing to pay more than Zillow or Redfin estimate, then the 'real' value is higher.

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

#249

Post by [deleted] »

djrogers wrote: post #248
Jemaclus wrote: post #191

Earlier quoted context omitted.

I used to work for Z, and I can confirm that the Zestimate is just that: an estimate. It doesn't know things like whether you did renovations or whether the house next door caught on fire and burned down and things like that. If something about your particular house changed in the last few years, the Zestimate is likely to be way off. That said, it's fairly good as far as comps go, and if you have an average house in…

> I was like... what? You listed for X, we offered X+100K, you don't get to counter that Apparently they do, because... >they wound up selling for 175K over asking price And, as for this: >Instead, we actually rely a lot on the Zestimate and Redfin's estimate to figure out what the "real" value of the house is Let me give you a lesson from econ 101 - the 'real' value of something is whatever someone else is willing t…

[deleted]

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

#250

Post by flubert »

BeetleB wrote: post #204
encoderer wrote: post #190

Earlier quoted context omitted.

You think estimating the value of every home in the country within 10% is bad? Lots of criticism of zestimate but I'm curious: is anybody doing AVM better and for free?

>You think estimating the value of every home in the country within 10% is bad? It may be good from an "interesting problem" standpoint. But if your house's Zestimate at $300K, 10% means it's real value is somewhere between $273K and $334K. Not very helpful, is it?

Does anyone have a source of data for the variance of the home prices in the U.S.? Getting within 10% sounds spectacular, considering that I think you could get close to 10% price differences between different combinations of buyers and sellers on the exact same property. If someone were to come up with an algorithm for predicting the price of a steak dinner at a restaurant, using spotty 5 year old data, I think everyone would be impressed at getting it correct within $3 of $30.
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