Suburban Homeowner Sues Zillow Over Home's ‘Zestimate'

The home was last listed at $626,000, and has a “Zestimate” of $551,252

A suburban homeowner is suing Zillow, claiming the real estate site’s estimate on the value of her home is keeping her from selling it at the price she believes it’s worth.

The so-called “Zestimate” for Barbara Andersen’s home is more than $70,000 below the current asking price for her three-bedroom townhouse in Glenview, Illinois, according to Zillow’s website.

The home was last listed at $626,000, and has a “Zestimate” of $551,252.

Andersen said last fall, her Zestimate was somewhere around $650,000, but when she decided to switch to “for sale by owner,” that all changed.

“When I went to for sale by owner, all of sudden out of nowhere my market value from the Zestimate just started to plummet,” Andersen told NBC 5.

A Zestimate, the company’s website states, is “Zillow’s estimated market value.” Though the company notes it is “not an appraisal” and should be used “as a starting point to determine a home’s value,” the suit states the estimate is “effectively a sloppy computer-driven appraisal” and meets the definition of an appraisal under Illinois law.

“I didn’t think this was a proper legal thing to do,” Andersen, who practices real estate litigation law, said.

The suit seeks to have a court either require Zillow to remove the Zestimate from her home’s listing or “amend it to an agreeable market value” in addition to reimbursing Andersen for the cost of filing the ligitation.

It claims Zillow “should not be engaging in this business practice without a valid appraisal license and, further, the consent of the homeowner.”

In a statement, Zillow said, “We believe the claims in this case are without merit."

“We always say that the Zestimate is a starting point to determine the home’s value, and isn’t an official appraisal," the statement read. "What’s more, the plaintiff can update her own Zestimate by adding the square footage of her home to her for-sale-by-owner listing. If she did that, she would see an immediate adjustment to her Zestimate."

The real estate website’s information page on the Zestimate said its accuracy “depends on location and availability of data in an area.”

“Some counties have deeply detailed information on homes such as number of bedrooms, bathrooms and square footage and others do not,” the page reads. “The more data available, the more accurate the Zestimate.”

A spokesperson for Zillow added that the company tells homeowners looking to sell their property "if you're serious about selling your home you should work with a qualified real estate agent."

“I understand for a lot of people their home is their biggest investment and people care about how their home is characterized on the internet,” Emily Heffter said. “We really try and give consumers a lot of power over what their Zestimate looks like and what their home looks like. Clearly homes sell for something other than their Zestimate all the time.”

According to Zillow’s site, the company claims the Zestimate has a national median error rate of 5 percent.

“Of course it’s inaccurate because it’s a computer-generated model but it’s the most accurate independent estimate of home values on the internet,” Heffter said, adding that other real estate sites publish similar estimates as well. “We think it’s helpful.”

Andersen bought her three-bedroom, two-bathroom home overlooking a golf course in the north Chicago suburb in 2009 for close to $630,000, records show. The home was listed for sale in 2013 at $650,000 and $670,000 and again in 2014 at $720,000. The list price has dropped and risen since then before landing most recently at $626,000.

“There’s a lot that goes into an appraisal, not just looking at public record, which is what a Zestimate does,” Andersen said.

Andersen admits that she didn’t realize her case would get the attention it has since received, noting that she has “opened a can of worms.”

“I really thought it was going to just be something simple and it really just exploded from there,” she said. “Even if my suit settles, we’ll continue on with the dialogue, which is helpful for all of real estate.”

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