I have long been a proponent of the homeowner’s right to opt out of the Zillow zestimate attached to their home, especially when the home is for sale and a grossly inaccurate zestimate is attached to it. It is misleading to prospective buyers and can hinder a sale. Zillow has long been a proponent of telling homeowners to go pound sand (the zestimate remains).
Zillow’s Sara Bonert raised on interesting debate when she suggested, in this Active Rain post, that failure to list on Zillow may be a breach of an agent’s fiduciary duty to the seller.
In order to get your answer, I suggested Zillow answer these 3 questions:
1. If a seller asks that their home NOT be listed on Zillow as for sale– because it they want a PRIVATE sale, will Zillow honor that request?
2. Can a homeowner opt out of the zestimate?
3. Will Zillow remove a grossly inaccurate zestimate from a seller’s home?
I believe the answer to all is a resounding “NO!” I think 3 knocks Zillow out of the water when it comes to fiduciary duty since it is NOT in a client’s best interests to have MISLEADING information associated with the marketing of their home. Don’t you agree, Mr. Barton?
I would argue that it is a breach of an agent’s fiduciary duty to list a home for sale on Zillow when the zestimate is grossly inaccurate.
I think Zillow has a valid reason to give homeowners the right to opt out of the zestimate or remove a grossly inaccurate zestimate from the seller’s listed home for sale— without that right, Zillow cannot make the argument that failure to list on Zillow is, in any way, unfair to sellers trying to sell their homes.
Related Posts:
Unzestimate My Home: Will Zillow Let Owners Opt Out?
Owners in Zillowland: We Want Out, Zestimates Removed
Will Listing Your Home Above the Zestimate Turn Away Buyers?
Technorati Tags: zillow, real estate marketing
“that failure to list on Zillow may be a breach of an agent’s fiduciary duty to the seller.”
Joe- I want to be very clear that I did not make this statement on that blog post. Mine was a question of what responsibility did an agent have to list a home on THE INTERNET. The only reference I made to Zillow in that original post was to cite the fact that I worked there.
Further, the post was not meant to be a “suggestion”, but rather an idea to be debated.
The conclusion I made was that I believe the agent is require to do, from a marketing standpoint, only what they said they were going to do in their contract with the Seller.
Please do not suggest that I think one should be required to list on Zillow.
I have to agree that zillow is pretty inacurate. We just recently bought a house and zillow had the house we purchased way overpriced. We put an offer on it and almost lost it because we were using government assistance and our loan had to be for the appraised value. The true value of the home was a lot cheaper then zillow stated. Thank goodness we were able to rewrite the contract and the seller accepted.
Hi Sara
Sorry if there is any misunderstanding regarding your post. I read it in this way– that your question suggested it MIGHT be a breach not to list on internet sites, of which Zillow was one, based on its high traffic of consumers. Based on the comments, others saw it that way too. (I suggest readers here take a look and decide for themselves)
Well, since you are here, what is “your opinion” on the subject you raised for debate—
Do YOU think it is a breach of fiduciary duty to not list on Zillow? (Assume there is no contract between the parties.) Surely, you have an opinion.
BTW, what happened to the post?
Hi Joe,
The inaccuracy of zestimates is a major problem. The zestimates will never be able to compare apples to apples, because there is no understanding of individual neighborhoods. It’s an impossible task to accomplish without the knowledge of the neighborhood variations.
That being said, I look at Zillow as another avenue to reach buyers. To me it’s just another place to look for homes on the internet. It’s not a place to determine a home’s value.
Sara
Why was your post taken off the “public” view?
http://activerain.com/blogsview/513872/The-Great-Zillow-Marketing
Hi Debra
Yes, good point. How do you feel about listing a home for sale when the zestimate is below your asking price (assuming your asking price is FMV)? Do you think that inaccurate zestimate is misleading? Do you think it might turn away buyers?
Joseph,
As a lender, I have yet to find a zestimate accurate within 5% in either direction. I have found using Zillow to be beneficial when looking for comps in the neighborhood that will help determine the actual value.
I usually take that data and ask my appraiser if there is any other data out there and to confirm that we are in the ballpark (with the comps not the zestimate).
Zillow for the consumer is a place to look at homes, for others in the industry, it is a great place to start when looking for a property’s value.
Assuming that the zestimate on a particular house is inaccurate, and that the owner is being damaged by the zestimate…
Wouldn’t the burden of proof be on the homeowner to prove those two things?
Aren’t the zestimates ultimately based on town assessor values? If those are off, the the zestimate will be off as well. It’s one thing to complain that the zestimate is way lower than the value of the house, but if you haven’t pulled permits and reported everything to Town Hall…
Great questions. I am very sorry to hear the answers.
Aloha,
Keahi
Chris
I was looking at Zillow from a seller’s point of view, where the zestimate is inaccurate and the seller wants it removed. Zillow will not remove it.
Athol
I would say yes as to proof of inaccuracy but no as to proof of damages, especially if the home is listed for sale.
You would have to ask Zillow if zestimates are ultimately based on tax assessor values– but I do not think they are determinative.
As a committed zestifarmer, I welcome those discussions with sellers and buyers as to why the zestimate is inaccurate. Texas is a non-disclosure state. It is illegal to publicly post sales data. The best public data you can get is the lien information from the county clerk and tax assessment data. Over time zestimates will become ever more accurate, but in the meantime, if the zestimate doesn’t match, consult your Realtor! This is absolutely a wonderful tool for professional Realtors to validate their value in the marketplace. After all. isn’t web 2.0 about conversations?
Joe I don’t believe you could prove damages without the proof of inaccuracy. The follow up question would always be “so how damaged is the seller”, I’d assume you’d need actual figures for the judge to look at.
I guess the hard part is proving accuracy or lack thereof. Even if an assessor comes out and comes up with a figure, a different assessor could come out and give a different value on the property. Even an actual sales price may not fully reflect a theoretical fair market value as the needs of the individual seller and buyer may influence the sale price. It certainly doesn’t reflect seller contribution to closing costs etc.
That being said, I believe you’re making an assumption that the sellers price is more accurate than the zestimate. That may very well be true, but it may also not be true. If the zestimate is spot on, and the seller wants way too much, it would be unsurprising if the seller wanted the zestimate removed.
Two fairly likely reasons the sellers price is significiantly higher than the zestimate is greed/denial/fantasy by the seller and improperly reported to town hall major home improvements. Another primary reason would be inaccurate town assessments in the first place.
I would be very interested to see how accurate town assessments are to actual sales prices. Those assessments are printed on every MLS page in Connecticut, and furthermore thousands of dollars of tax are based on them to boot. Why don’t sellers complain about woefully low town assessments of value as well as low zestimates?
According to Zillow if they lack enough data to run the public data through the secret formula, then the zestimate = town assessed value. It’s posted here -> http://www.zillow.com/howto/DataCoverageZestimateAccuracy.htm
So in theory in some parts of the country the zestimate the seller is complaining about may in fact be the exact same figure as the town assessor put on the property.
By no means am I discounting your concern that Zillow may be botching individual zestimates and essentially doing nothing about it, I believe that is true. However the proving of that… not so easy.
For this comment, I am assuming a homeowner who is trying to sell their home and zillow attaching an inaccurate zestimate to the home.
Thomas,
Yes, Web 2.0 is about conversations but my focus is on homeowner rights with respect to their property, which rights exist with or without a conversation. As to the conversation, Zillow does not listen to homeowners who want out of the zestimate– just read the forums. IMO, zestimates will never improve over time– they will always lag the market because the source of their data is, in large part, local assessment data. But here is the KEY POINT– knowing the overall error rate for Zillow means absolutely NOTHING when valuing a particular home (as you know). IMO, Zillow is buyer-biased and will not recognize the homeowner rights I have written about, the one in this post being the right not to have misleading information attached to a home.
Athol,
We can agree that although zillow uses tax assessment data to create zestimates, tax assessments are not the same as zestimates. One is public data, the other a proprietary creation of zillow.com
My main Zillow gripes: homeowner sole right to advertise & market, right to remove inaccurate info
From my point of view as a homeowner, I do not want Zillow putting their value price tag on my home — especially if it is inaccurate. The cure is not for me to correct the zestimate for Zillow– it is for Zillow to remove it. (I cannot stop the tax assessor for putting his value tag on my home because I impliedly consent to his valuation in order to calculate my property taxes. If I want to correct his value to reduce my taxes, I must submit proof and it will be done.)
I also believe homeowners have the right to market their homes privately– Zillow will not honor that right– if a 3rd party says the home is for sale, it is marked “for sale”– the homeowner should have the right to say “take down that 3rd party’s “for sale” sign on my house”. Zillow will not let that happen– in order to remove the3rd party for sale sign, the homeowner must claim the home– that should not be required.
Also, Zillow is letting 3rd parties advertise homes they have no right to advertise. In addition, these 3rd parties can have a Q&A on the home– all without the homeowner’s knowledge. I am wholeheartedly against this practice. Only the home owner, or the listing agent, should have the right to advertise and market the home for sale. This is a MAJOR violation of a homeowner’s right and the one most likely to lead to litigation– and success by the homeowner who brings it.
Re: damages
In a court of law, yes, the damages would have to be proved to recover a money judgment against Zillow– not an easy task. But that is not what I am talking about. In this post, I’m talking about preventing zillow from putting an inaccurate zestimate price tag on my home. And, yes, I am assuming a homeowner’s honesty (or the listing agent’s honesty in pricing the home for sale). Damages need not be proven in order to remove an inaccurate zestimate.
Let me try this analogy– if I stand on your lawn with a sign that says “this house is worth $300k” and you have it for sale for $350k, do you have to prove damages to have me and my sign booted from your property? — I think not. You will say– “But Joe, that’s trespassing”. Yes, trespassing does not require you prove damages to have me stop me violating this property right. So you might say Zillow is virtually trespassing on a homeowner’s property by placing inaccurate zestimates beside their home.
One might also argue that consumer protection statutes require that misleading public information about a home for sale be removed without proof of damages.
re: different values by different assessors vs. removal of inaccurate zestimates
This should not determine if an inaccurate zestimate is removed. The question is not so much “what is the correct value?” as that the zestimate you got here is way off– so remove it. Simple. As you know, assessors value homes by comps and it is not unusual for them to take the highest recent comp to establish value. Assessors, like zillow, do not inspect a home. I have challenged tax assessments over the years and speak from my experiences in New York and Maryland.
re: low tax assessment values and homeowner complaints
Consumers do not complain about low assessment values because they are NOT required to do so in order that their taxes be raised.
Zestimates and tax assessment values concern 2 different things– one is property taxes — and as I said, homeowners are under no legal duty to correct the tax man to raise their taxes. The other (zestimate) is about valuing a home for sale or otherwise.
Re: where zestimate = town assessed value
As long as they call it “town assessed value” and not zestimate, I have no problem with it. I believe they still call it a zestimate.
Sorry for this disjointed reply but bottom line is a homeowner has a right to have inaccurate public information about their home removed, regardless if there is any proven damages. They are not required to correct it for Zillow.
I’ll change tacks
A zestimate is protected free speech. It’s up to the seller to prove they are “yelling fire in a crowded movie theater” and causing ilbelious injury to the seller.
How does that argument work Joe?
This devils advocate thing is fun!
I can dance to that tune too.
There are 2 kinds of speech– the speech we all know and love– the speech of ideas and insults. The other is “commercial speech”– the speech of commerce, of salesmen, of hucksters. If a home is listed for sale or advertising is sold around a home for sale, we are in the commercial speech section. Commercial speech can be more easily regulated, even suppressed– eg false advertising– no fire in the theatre required— just a public interest.
I would argue Zillow’s erroneous zestimate near a home for sale is false and misleading commercial speech– so take that sucker down. It is not in the public interest to have false and misleading information about a home made public (esp in perpetuity on the net– another can of worms)— even zillow will remove false Q&A speech if an owner flags it– why can’t a homeowner flag a zestimate for removal?
Aha, hadn’t really be aware of the free speech divisions.
Now what about all the other automated home valuations on all the other websites…. Cyberhomes, Coldwell Banker, Prudential…. yada yada yada. There has to be dozens of different home valuation widgets online. Do you have a beef with them, or just Zillow because it’s the best known?
Heck you could even list with a brokerage, and have the brokerage AVM suggest you’re overpriced. (That thought just occured to me, it’s kinda funny really)
Does knowing about the speech differences change your position on removing inaccurate zestimates (let’s assume the inaccuracy is proven material)?
I have always been an advocate of homeowner rights (it is their asset Zillow is using to make money) and I think Zillow violates them by (1) refusing owners the opt out or removal of inaccurate zestimates, (2) allowing 3rd parties to advertise their home for sale and conduct Q&A on them– all without homeowners’ consent or knowledge.
(3) They also refuse to recognize the homeowner’s right to market privately.
Do you think any homeowner rights are violated by Zillow?
I am not aware of another AVM site that treats owners like this. So that’s mainly why I have a beef with zillow. (And going after the lead dog is the best way to draw attention to these homeowner rights) Perhaps I spend too much time in the forums and hear the same complaints and same responses.
Also, the other AVM sites provide a range of value. Yes, I know zillow does too but they focus on and promote the zestimate and its error rate. They even go so far as to use zestimates in the Zindex– to the exclusion of an actual recent sale price. See
http://tinyurl.com/4d9rpa
Note also that while agents who provide CMAs are required under certain state laws to place prominent disclaimers on the report– zillow gets a pass. That doesn’t seem fair to me.
Otherwise, I think zillow is a so-so consumer site– I see it more as an ad site for professionals– which uses home valuation as the main draw for traffic. (I think PropertyShark.com is much more useful– it digs much deeper into the public data BUT does not pass judgment on the data (as Z does with the zestimate)— in terms of info, the shark makes zillow look like a guppy)
@Athol
Thanks for addressing Cyberhomes. Cyberhomes has more than 100 million records, covering more than 85% of the U.S. population (including 2.5 million listings). We’ve aggregated our listings so quickly because we have contracts signed with top real estate firms, franchisors, and most MLS’s to upload their current listings to the site.
As far as “evaluations” go, most other sites, as you know, rely on public tax records for their evaluation data. We are different in that we are owned by Fidelity National Financial, which houses the largest title agency and is the largest provider of MLS services, so we fundamentally have more content from within the FNF family of companies from which to aggregate our data. We update more than 575,000 new ownership records every month, verified from the original source.
Aside from that, you can edit a specific home’s facts to get a more accurate and immediate new evaluation. Not only can you edit the home information, but you can also adjust the “estimate” by entering home improvements and local market conditions. Even with all of the accuracy measures put into place, www.cyberhomes.com will give you an estimate along with a range.