Sellsius real estate marketing blog

Truth Unveiled by Time (Bernini, 1645-52)

It is the duty of the entire real estate community…to guard consumers from hoaxers, con-men and frauds….If we are silent when confronted with the public’s gullibility toward the Zillow.com fraud, we are complicit in that harm. (Greg Swann, from Tell the world: Zillow.com is bunk)

Preface: We are advocates for free speech and free “informed” choice. We acknowledge the right of every person to express their opinion, whether we agree with them or not. You should know where we stand: We are pro-real estate professionals & pro-consumer. As professionals we owe a fiduciary duty to our consumer clients. We must act in their best interests above our own. The above quote expresses what this duty to consumers entails. What we don’t understand is when someone seemingly backs-off a consumer issue that they so strongly defended in the past. Why would they do it? Did they realize they were wrong in their criticism? What did the oracle tell them? Did we miss something? Have they taken the blue pill? We just want to understand why the change of focus away from the consumer? Hence this post to distill the truth from the sea of recent madness. Read and decide. Then tell us.

The issue: Is Zillow misleading ordinary consumers at Zillow.com?

Read. Rinse. Repeat: Absent proof of demographic manipulation of the black box (denied by Zillow), we ALL know the racial/redlining/predatory lending complaints against Zillow’s AVM are absurd and there is no need to beat that horse any longer for ratings. Computers cannot be bigots. Let’s take this issue off the table lest it continue to pollute the waters over what should be our focus and duty: THE CONSUMER. So to that end we ask again: does Zillow mislead ordinary consumers under the law? This is the truth we seek.

We have never said, nor do we believe, Zillow “intentionally” misleads consumers (unlike the former Greg Swann. More on that below). We see it as hubristic misleading. The professionals get it. The thinking man gets it. But maybe not the average/ordinary man who is impressed by Zillowspeak and those “zillified brokerages” (Greg’s term) who become a “party to this fraud” (Greg again) by adopting their API.

We ran a Zillow poll and some voters do trust zestimates. Are none of these voters average? But the issue of consumer deception is, in the end, a legal notion created by our democratic republic. Disagree with the law, as is your right, but the law is what we must answer to. The question is now before an administrative body, the FTC. It is not before a court of law. It is not a criminal proceeding. Now or later, the truth will come out for consumers’ sake. Unfortunately, the din raised by NCRC’s racial claims has drowned out the issue consumers, and professionals who serve these consumers, are entitled to have answered. Does Zillow.com illegally mislead?

Our blogging colleague, Greg Swann, has maintained for a long time in his ongoing series of forcefully written posts that Zillow is intentionally misleading, even deceiving, consumers. He had held that hard line until his apparent epiphany brought on by a little back-slapping, high-fiving by David G of Zillow for his defense of Zillow to the racial bias claims of NCRC. The racial bias claims & the “you know the type” complainant had caused the bloodhound to lose the scent of an issue that he can’t make go away: Is Zillow.com misleading the non-professional consumer? We think he dropped the consumer bone for the heady & juicy racial bone. The dog who once faithfully guarded the consumer was enticed by a rare meat to guard the Zillow bank vault instead. His bark for consumers has become a whimper—the effects, no doubt, of swimming in the Sea of Racial Madness and lapping from the river Lethe (or was it swilling the secret sauce?).
Before we dive into this, another disclaimer: These statements were taken verbatim from the posts and, in our opinion, are representative of the intent of the author. We urge you to read the entire post to see if the statements quoted are accurate &, in fact, represent the true intent of the author. Also, since we know Greg to be a wordsmith who is dogged in his proper use of language, let’s gets some definitions out the way, courtesy of Mr. Danny Webster: We left out those expensive latin terms like caveat lector.

Deceive: to cause to accept as true or valid that which is untrue or invalid; to lead astray, usually by underhandedness
Knowingly: with knowledge or intelligence
Deliberate: characterized by awareness of the consequences
Fraud: intentional perversion of truth in order to induce another
Mislead: lead astray; give a wrong impression
Induce: to move by persuasion or influence
Dupe: to deceive, cheat or make a fool of
Ordinary: of a kind to be expected in the normal course of events; of common quality, rank or ability
Hoax: an act intended to trick or dupe
Malfeasance: wrongdoing or misconduct

From the writings of Greg Swann:

Zillow does not empower consumers. It knowingly deceives them.

Zillow.com is a fraud

Zillow.com is a hoax

Zillow.com is bunk. Tell everyone you know.

Zillow.com’s fraudulent promises…take a look at these promises made on Zillow.com’s home page … What is Zillow promising if not “knowledge” of the values of homes it has never seen. Do you think this is ambiguous?

To market AVM statistics as though they were an appraiser’s or broker’s opinion of value is fraudulent, the deliberate gulling of a gullible public.

To induce ordinary haphazardly-informed consumers to do so strikes me as fraudulent.

The scheme (by others using zestimates) is only possible because Zillow.com has represented itself as an authoritative source when the principals of the company know that is untrue.

They blur the distinction between AVM results and an opinion of value.

Zillow.com tries to dupe ordinary consumers….into believing that the information it dispenses is valid and valuable, neither of these is true.

So what would I call a real estate brokerage that makes itself a party to this fraud? (referring to Prudential California/Nevada Realty)

I think Zillow.com misleads consumers by implying that its AVM is a valid and useful way of pricing homes.

At some point Zillow.com may elect to tell the truth

Zillow.com cannot possibly, cannot ever, cannot under any circumstances tell the truth.

If you can’t tell the truth, tell a Big Lie…

Zillow.com is deceptive in its portrayal of what it can and cannot do.

Zillow.com has a problem. People treat silly zestimates as though they were appraisals.. (yes, he said that. It gets eerie later, so look for it.)

Portraying AVM results as being the equivalent of an appraisal is deceptive
The results they produce are necessarily erroneous—and I have zero doubts that they know it.

I believe what Zillow.com does would be actionable professional malfeasance if done by a real estate licensee. (Note: Zillow is a licensed Real Estate Broker in several states)

A Zillified real estate brokerage: If you lay down with dogs, you wake up with fleas … (we couldn’t agree more).

What Greg Swann says now:

“Bogus claim number one: Zillow’s results are fraudulent. The charge is absurd on its face” “Zestimate does have value….it is a starting point, that’s all…. The charges against Zillow are wholly specious and without merit….Their not adding the disclaimer language is not fraudulent.” Some mention of thoughtful people and thoughtless people but no mention of “ordinary” people. (from Defending Zillow.com). Oh yeah, his differences with Zillow are now “small”. So I guess he has to retract the actionable professional malfeasance accusation. Will he?
We definitely see a change in his position and it raises some interesting questions. Consider, as we have:

Why debunk Zillow if consumers already know it’s a toy? Why accuse Zillow of fraudulent promises if there are none? Why do you suppose “Zillow has a problem. People treat its silly zestimates as if they were appraisals“? Why do you think “Zillow.com misleads consumers“? Were you serious when you said “Zillow does not empower consumers. It knowingly deceives them” and is “deceptive in its portrayal of what it can and cannot do”? Did you honestly believe it rose to the level of actionable professional malfeasance if done by a real estate licensee”? When did all this fraud, deception, lying & malfeasance end? We missed that post. Thousands of little lies & you tried to count them all. But why count what does not add up to a whit, legally? Did you correctly suppose consumers needed to be convinced of Zillow’s inability to tell the truth over and over again? If not, it seems like a grand waste of time and logic.

Why is the hound barking a new tune?

Could Greg Swann be trying to back out of his deception/fraud attacks against Zillow and using NCRC’s racial bias claims to do it? His focus is now strictly on that portion of the complaint. Focusing on the racial issues naturally diverts attention from the consumer issues he himself once raised. But why? Could he no longer defend his fraud rhetoric in defense of consumers? Perhaps. Very few professionals (on record) thought Zillow went that far. But Greg was at least admired for his doggedness in defending that minority position.
Or could it be that Mr. Swann now wants to distance himself from NCRC, whose charges against Zillow.com eerily mirror his own, via-a-vis “intentional” consumer deception, as set forth in complaint number one? Say it ain’t so Greg. We merely pose the question, dear reader. Decide for yourself if you see any similarity between former Greg Swann & NCRC below. Remember, we left out the racial bias claims and focused only on the “misleading the consumer” charges. [NCRC should use Swann’s Pinnocchio wept as a blueprint for its case on consumer deception. In our opinion, it is much more persuasive than Debunking Zillow.com and trully focuses the legal issue from the consumer viewpoint. It may have been his best Zillow post, although he would probably disavow it now, if not spin it on its head as actually a defense of Zillow’s approach to consumers.]

From the NCRC Complaint against Zillow.com before the FTC: link to FTC complaint.

Zillow.com’s practices deceive consumers…

Zillow.com is intentionally misleading consumers…to rely upon the accuracy of its valuation system.

The full knowledge of the company officials that their AVM is highly inaccurate and misleading to consumers.

Zillow.com’s misrepresentations …are likely to cause substantial injury to consumers who rely on the inaccurate representations made by the company

Zillow.com stated goal is “to empower consumers” with information and tools..

Zillow.com calls this valuation a Zestimate and fraudulently represents that is a “Kelley Blue Book” for homes.

Zillow.com fraudulently represents to the public…..a gross misrepresentation of the site’s accuracy

Zillow.com, recognizing the inherent weakness of its own AVM, tucks the following disclaimer into the “How to Use Zillow” section of the site.

The “average” consumer who relies upon zillow.com mistakenly believes that he or she is receiving a valuation equivalent to one conducted by a valuation professional. (Note: Now isn’t this eerie?)

The consumer focus is leading consumers to believe falsely that the comparable information on the site is accurate.

This misinformation, in turn, facilitates poor consumer choice or (others using zestimates) who target trusting or unsophisticated consumers. (Note: sounds like the scheme Greg referred to)

Growing number of real estate professionals …are using the misinformation to perpetrate fraud in our nation’s market… (Note: Sounds like the flea-ridden Zillified brokerage “party to this fraud” Greg wrote about)

The output of an AVM is not an appraisal. Again, some consumers, in particular, do not understand the esoteric distinctions….

Zillow.com is not properly addressing these questions in presenting information and/or its disclaimers to consumers on its website. They do not adequately explain why their data so seriously deviates from valuations completed by appraisal professionals.

Zillow.com’s representations on its website are false or misleading and their practices constitute deceptive acts…(in viloation of law )

Personally, we think the Mr. Swann was a lot harsher in his criticism of Zillow than NCRC. He also made a stronger case than NCRC. But understand, NCRC filed one complaint while Greg filed no less than 10 blog posts against Zillow from July 25-October 3, 2006.

It is the duty of the entire real estate community…to guard consumers from hoaxers, con-men and frauds….If we are silent when confronted with the public’s gullibility toward the Zillow.com fraud, we are complicit in that harm. (Greg Swann, from Tell the world: Zillow.com is bunk)

Buddha

Veritas vincit.