A lawsuit in the US is stirring interest in the UK – with questions being asked as to whether something similar could happen here.
The States litigation concerns a home owner who says that a large chunk of money was knocked off the value of her home by an automated ‘algorithm’ tool on the property portal Zillow.
Barbara Andersen is trying to sell her home for $626,000, but Zillow’s Zestimate values it at $544,806.
Andersen says the Zillow valuation is wrong, as it based on cheaper houses in Illinois, and is damaging the prospects of her own sale.
Andersen, a lawyer, is not looking for cash or compensation, but for the estimate to be amended.
The lawsuit also challenges the legal status of ‘appraisals’.
Zillow argues that its Zestimates are not appraisals, but Anderson claims that as they “are promoted as a tool for potential buyers to use in assessing [the] market value of a given property,” they meet the definition of an appraisal under State law.
She says that in the US – where realtors must be licensed – this means that Zillow should also be licensed to perform appraisals before offering such estimates, but should also obtain the consent of the home owner before posting them online for everyone to see.
Zillow has said that the litigation is “without merit”. It has been offering Zestimates since 2006. The tool offers “estimated market values” on homes whether they are for sale or not.
Agents and home owners are critical of Zestimates, according to the Washington Post. It says that the estimates are sometimes 30% adrift in either direction.