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Zillow’s Bogus Listings: Houses Listed for Sale Without Owners Knowledge

Published by Joseph Ferrara April 5th, 2008 in zillow.

I just wrote a post on the fake ads on Craigslist. Now, I read there are similar shenanigans going on at Zillow. Seems folks will find the holes in any system, even ones built with zillions of dollars, like Zillow.

Case in point:

Mr. John Contos’ California house was listed for sale on Zillow, without his knowledge or permission. Furthermore, it was listed $150,000 below market value. On top of all that, the house isn’t even for sale. It was reported that Mr. Contos was “shocked”. (I wonder if anyone explained the RE.web to him.)

Seems Mr. Contos wasn’t the only homeowner Zoodwinked. His neighbor, Stepan Denisyuk, who hadn’t even heard of Zillow, learned his house too was listed for sale on Zillow. The price was listed on Zillow for $60,000 less than Mr. Denisyuk was asking. Zowie Zillow!

The Homeowner’s Right to Control the Marketing of Their Home

I had often opined that Zillow is ignoring the right of homeowners to decide where and how their home should be marketed. Clearly, there are risks to the homeowner if Zillow allows any Tom, Dick or Brian to list a home for sale, and engage a Q&A, without the owner’s knowledge. First, not all homeowners know of Zillow or what goes on there. These folks are at risk for any manner of scam or misrepresentation concerning their homes if they do not visit Zillow. Secondly, Zillow does not police the third party listings to determine if they are legitimate or not. They leave it to the so-called “community” to police it. But how can the community police Zillow listings? How would anyone but the owner know information is false or the “for sale” listing bogus? These bogus listings are stumbled upon, not uncovered by Zillow or the so-called community police. The answer is simple—only allow owners or their agents to post homes for sale. Zillow refuses. As a homeowner, I believe this is a violation of my property rights. Don’t you?

Here is an interesting exchange I had with Rich Barton and David G of Zillow, back in April 2007, concerning these issues:

I asked Rich Barton: what if a homeowner objects to a stranger listing their home for sale?

His reply: Zillow is fine with posting coffee shop gossip. It stands unless incorrect.

I ask: OK, but how can false statements be removed if the homeowner doesn’t know about them?

Mr. Barton dodges and David G takes the bullet: Hey, the homeowner’s not around when we’re gossiping about the home. Let’s just take that gossip and carve it on the internet, like a cave painting. No, homeowners can’t opt out.

I point out the flagging system flaw and ask for a homeowner opt-out

David G, in his terse reply, recognizes the seller/agent’s sole right to post a listing but says “reporting” is not listing.

He again admits the seller/agent’s sole right to advertise but says reporting is not advertising.

Zillow Myths

Zillow Myth number 1: Online posting is the same as offline gossip and the homeowner is at no greater risk.

Fleeting neighborhood gossip among a few folks in Starbucks is not the same as posting on a real estate website, where it can be seen by millions. Besides the numbers, one is transitory, the other permanent. One is real estate specific, the other is not. I submit, a falsehood or mispresentation concerning a person’s home can do far more harm to a homeowner on Zillow over the internet than it can at Starbucks over a mochachino.

Whether Zillow calls it posting coffee house gossip, or informing or reporting that the house is for sale, the result is still the same– if it is being done without the homeowner’s knowledge, they are at risk, since they cannot report something they are unaware of. And unlike at Starbucks, the folks are going to Zillow to look at homes for sale and possibly transact business on that home. A falsehood there can really harm the homeowner.

The worst part is the homeowner cannot opt-out— meaning he or she has to keep a watch on the home on Zillow, assuming they know it exists (Stepan didn’t) or be forced to claim it (exactly what Zillow wants the homeowner to do). Homeowners should not let this stand. They are entitled to opt-out of the Zillow circus.

Zillow Myth 2: Reporting a home for sale is NOT listing it or advertising it for sale.

Zillow tries to make the distinction that a non-homeowner who reports a home for sale & puts a sales price tag on it is NOT listing or advertising the home for sale. They did not make that distinction to Mr. Contos and Mr. Denisyuk. They removed the listings. If it was coffee house talk, the listing should have stood until the owner claimed the house. (I think I may have a comment by David G on this where he suggests as much– damn, I have to look for it.) The Contos case may set a precedent– hey David G., if an owner calls Zillow to remove a bogus listing, will Zillow do it without requiring them to claim the home?

And let’s face facts. The home listing with a sale price is an advertisement. Who else but real estate agents and lenders looking for business are going to list/report a home for sale? I’d wager less than 1% are ordinary coffee drinkers or soccer moms looking to “inform the community” that Mabel’s house is for sale. Yeah, right. (do you have the stats on how many non-professionals are reporting homes for sale on Zillow, Mr. G?). It seems clear to me, Zillow’s little smoke and mirror reporting gimmick is designed to get real estate professionals to list other folks homes for sale to get business– to use people’s homes as bait. The purpose is to get someone to call you — and that’s what advertising is meant to do. This has been so since we left the cave.

Zillow Myth Number 3: The community, through a flagging system, will police the site to reduce false and misleading information about people’s homes.

The case reported above was also proof of the glaring ineffectiveness of Zillow’s flagging system— if you don’t know your home is listed for sale, how the heck can the homeowner (the home’s ultimate authority) flag it? Zillow pooh-poohs it, using the coffee house analogy (if you didn’t hear the gossip there, why should you care if you don’t see it posted on Zillow). Zillow does not police non-owner listings to see if they are legitimate. They rely on the community (visitors) to flag it. But the community is not checking the gossip to see if homes are being hijacked on Zillow and falsely listed for sale. Besides, the community can’t flag information they know nothing about. How the heck does anyone know a listings is bogus? They don’t. There is no community police force. The only interested party is the homeowner and if he or she is unaware that a stranger is posting false information, the community will not protect them.

The same flaw exists in the Q&A. If there is a Q&A taking place without the homeowner’s knowledge, how can the homeowner monitor it, much less flag it. Apparently, News10 had to alert Zillow before they removed the bogus listings. Amanda Hoffman of Zillow said these abuses are not common. My question to Amanda is “How do you know, since the flagging system is ineffective when the homeowner is unaware their home is listed?”

Bottom line: In my opinion, allowing anyone to list/report a home for sale, other the owner, or the homeowner’s designated agent, is a violation of the homeowner’s right to control the marketing of their home. I can see the court cases shaping up right now.

I urge any homeowner who objects to this practice to demand Zillow not allow anyone to report or inform that their home is for sale.. period.

Source for this post: News10.net

Some of Sellsius’ Zillow Archives (for your entertainment):

The Human Listing Site: Zillowfying Your Privacy Under the Guise of Transparency

Is Zillow Using our Homes as Bait? (a good one)

Did Zillow Actually Listen To Sellsius?
Discrimination by Zestimation: The Law of Unintended Consequences
Has Zillow Spiked the Google Juice?
Is Zillow Betaproof?
I See, Said the Blind Man to the Deaf Lady
Mining The Elusive Unzillowable
Realtor.com v. Zillow Video
Realtor’s Allan Dalton calls Zillow Carnival Act (warning: selltoon)
Sellsius Conversation with NCRC
The Truth Is: Zillow has a Right To Exist
Unzestimate My Home: Will Zillow Let Owner’s Opt Out?
Unzillowable, To Coin A Phrase
Will Listing Your Home Above the Zestimate Turn Away Buyers?
World’s First “Unzillowable” Listing
Z-Day: Z for Zendetta
Zillow Confesses…
Zillow, Dem’s Fightin’ Words
Zillow Housing Reports: The Statistical Lie of Estimate Truth
Zillow’s Real Prey: It’s Not Brokers
Zillow: Truth by Association (I like this one)
Zillow Ultimate Poll

Zillow Poll Results
Zillow Zapped with FTC Complaint
Zoophole: Only Humans Have to Post Conspicuous Disclaimers
Will Zillow Let Listing Owners Opt-out now?

Owners in Zillowland: We want Our Zestimates Removed.

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  • Nice work Joe

    This is another example of Zillow taking "transparency" princples too far.

    Following Zillow's policy/logic, the consumer learns not the truth that transparency is supposed to provide, but a lie.

    Ditto for Zillow's "Make Me Move" feature which gives transparency, not about the condition or value of the house, but only into the seller's greedy state of mind.

    I cover this topic in point 3 of The Failed Promise of Real Estate 2.0 http://blog.homegain.com/failed-promise-Real-Es...

    BTW how come Mr.Contos never heard of Zillow? Doesn't everyone know who they are and all about the "real estate revolution" they are leading?
  • Joe -

    The facts in this case are that someone abused the posting feature. We do respond to reports of inaccurate listing information and take complaints of that nature seriously. The bogus listings were immediately removed and the offending user's account terminated. Sites as popular as Zillow and Craigslist can unfortunately attract crazies - we deal with them as they're reported to us. Since the homeowner had claimed their home on Zillow they were immediately notified when this happened and so we were able to take swift action.

    Your post seems to suggest that the report for sale feature was somehow involved here. That's not accurate. This story is entirely unrelated to reporting listings for sale. Simply more inaccurate reporting on this topic.

    Louis -

    The homeowner was in fact a registered user on Zillow and that's how they were immediately notified when their home was posted.
  • David

    What about those homeowners that are NOT members of Zillow.

    Certainly there are more unaware of Zillow than those that are.

    Even those that know about Zillow, don't necessary view the site every day , or even every week or month.

    How are they to know that someone is pimping their home?

    I appreciate that you deal with crazies when you are made aware of them, but I think Joe is saying that for non Zillow homeowners there is no way to make Zillow aware of them as these homeowners are not aware of Zillow!

    Another interesting point is that while not everyone knows about Zillow, millions do, so Zillow ends up publishing unwittingly untrue unauthorized information to millions.
  • The post said many things David and there were a few questions:

    1. Do you know the % of non-professionals who "report" others' homes for sale? I bet it's almost 0%. Can you prove me wrong?

    2. Did both owners have to claim their homes to remove the bogus listings? (your comment was "homeowner")

    3. Would Zillow remove a bogus listing if the owner did not claim the home?

    4. News 10 reported that it notified Zillow of the bogus listing. Is that a misstatement?

    Care to answer any?

    The main points of the post are the 3 Zillow myths:

    1. the flagging system is virtually useless if a homeowner has no knowledge their home was listed by a stranger. (I like Lou's pimping reference)
    2. reporting of homes for sale IS listing and advertising them
    3. offline conversations are not the same as posting a home for sale and taking Q&A; on a real estate website. It has more risk to homeowners.

    In toto, this post supports my long held positions that:

    1. only homeowners or their agents should be allowed to list a home for sale on Zillow (or anywhere else), not third parties under a so-called reporting system that has no meaningful flagging system.

    2. homeowners have the right to opt-out of Zillow (a) zestimates (at least remove it if the zestimate is grossly inaccurate) (b) Zillow reporting by third parties and (c) Q&A; (especially Q&A;)--- all without the necessity of having to claim their homes.

    As you know, I support Zillow but I support homeowners' rights more. The fact that Zillow provides peeing opportunites for professionals is not justification to violate a homeowner's right to control where and how their homes are marketed. They have the right to choose NOT to be part of Zillow's website.

    One example to make my point:

    If I, as a citizen, want to sell my home privately, Zillow has absolutely no right to say I can't. They, in fact, do that by letting third parties report it for sale. Un-American.
  • No problem.

    1) I don't. It's not 0.
    2) No.
    3) Yes.
    4) No. Sorry if you think I suggested otherwise. I've advised the homeowner that they could have flagged the listing fro immediate removal.

    These questions again suggest you don't quite understand our approach here, Joe.
  • Z has to understand that the listing agent has a written agreement with the seller to advertise the property at a specific price for a specific time period and includes specific terms and conditions. The only people who should be allowed to post any property for sale on Z or any other site are the seller or the listing agent/broker. Anyone else allowed to post the property is just gossip.
  • That's the bottom line Mack.

    David

    1. I am surprised a technically advanced company like Zillow does not have this data. Perhaps someone ought to slip it in the company suggestion box :)

    Perhaps Zillow does not want to calculate the % of non-professional reporting since it would clearly show the purpose and design of the program is not soccer mom reporting but listing/advertising by real estate professionals for business.

    Why reporting on Zillow is listing & advertising:

    Since Zillow already has most of the data on a home, by simply adding "for sale" and sales price (with contact info)-- wala-- you have a "listing" advertising the home. If Zillow only had an address and I reported it was for sale at a certain price, then your "reporting" argument holds water. But this is not the case. Thus, reporting on Zillow IS listings & advertising. One day we shall see who is correct when a case is taken to court on the issue. Let me ask you, has any MLS objected to the "reporting" program as being advertising?

    2&3. What does a owner have to do to have Zillow remove a bogus listing? Is a phone call enough or do I have to send an email and proof of ownership?

    4. You said "I’ve advised the homeowner that they could have flagged the listing for immediate removal."

    Since the homeowner did not know that a stranger had listed the property, it was IMPOSSIBLE for him to flag it. And that is my point and the problem. And this is the same risk shared by other homeowners who have no knowledge of Zillow, correct? And this risk also applies to Q&A; for these homeowners, no?

    I am still curious: If an owner wants to do a private sale will Zillow let them opt-out of (prevent) "reporting" by strangers? Or does the buyer need to know supplant the owner's desire?
  • It would seem to me that it is the host organization's responsibility police it's own site. For all I know, my own home may be listed there w/o my knowledge or consent.
    And--just to be certain--I just checked with my personal RE professional who is at her computer right next to me as I type this--and she assures me our home is NOT for sale!
  • I agree Boomer. If Zillow were to police stranger listings, they could have all sorts of liability problems. So the easy way is to let the community do it, which they don't and can't. This neglect to police, as I see it, is itself a basis for liability if a homeowner suffers any loss or damage because of Zillow's "let stranger's post homes for sale" and "let the community flag" program. Time will tell.

    Zillow wants homes listed for sale and has decided that, if the homeowner, or agent, doesn't do it, we'll let some other professional do it and reward them by letting them put their contact info on the house-- for why else is the contact info necessary.
  • Comment rescued from spam.

    By: Robert Lawrence

    Great detective work on this. I wonder what would happen if more homeowners knew what Zillow was doing? I would never have known about this without your article, again thank you for this.
    Warm Regards,
    Rob
    http://www.battlecall.com
  • Sue
    There should be some way to confirm that the homes on the site are actually for sale. I had a homeowner call me recently regarding a home I had listed on Zillow that has long closed. Its closed out everywhere and was for some reason renewed on Zillow. The homeowner realized this as people were driving by his home slowly, then someone must have told him. I am surprised that it renewed and didn't just drop off from Zillow. This dates back to November of 2007.
  • One of my concerns is that the tax assessor will start using Z. to check property values. When asked it they'd use Zillow to assess property, our local tax assessor said they would use any information available to ascertain property values, and did not rule out the use of this data.
  • That is an extremely good point, Marlow.

    There is indeed a risk in increasing your property taxes by increasing your home value on Zillow. And consider what excuse you'll have when the assessor says "Hey, Mr. Owner, you input the data to increase the value, not us."

    I believe Zillow's Rich Barton did not update and increase his home's zestimate until just before he put it up for sale.
  • The coffee shop analogy bothers me. If Zillow plans on becoming a reflection of coffee shop chatter, I'm not sure serious advertisers are going to want to be associated.

    On one hand, it's admirable to aspire to transparency, but you'd better be prepared for the consequences when what is made transparent is ugly, false or, even worse, malicious and open to litigation. Privacy issues are in many ways more imortant than the zeal for transparency.

    Web 2.0 needs to be careful not to be blinded by a popular buzz word like "transparency" without thinking what it's full ramifications can mean.

    I might think it's a good idea to make my neighbor's amorous activities transparent by posting it all on my blog, but upon second thought, I think I'll refrain.
  • I could not have said it better Mike. Thanks.

    I always found it curious that Rich Barton would make that coffee shop gossip analogy (as if anyone wants gossip about them permanently on the web), but then again, he made the analogy of Zillow to the Kelley Blue Book (remember that?), when cars are more or less standardized commodities (ever see a car with a solarium?) and homes are as personal and unique as people, in most cases.

    Interestingly, Zillow dropped the Kelley Blue Book analogy (to their credit, I might add) which acknowledged, I think, the validity of the argument that homes are not commodities subject to valuation like cars, especially when valuation (zestimates) are posted without a visit to the home.
  • John
    Just think, can you begin to imagine a disgruntled homeowner who's home has not sold, finding it listed on Zillow for a much lower price, taking a low offer and suing Zillow for the difference between the offer and the listed market value.

    With enough litigants, Zillow will be dead.

    Coffee shop talk and gossip drove down the value of Bear Sterns in a matter of weeks, so what could Zillow do to your home, neighborhood, housing development or city. Municipalities, homeowner associations and developers should be consulting with their trusted legal councils, right now, with a sharp eye on liability and damages.

    Could Zillow be damaging our USA real estate market? As the Fed looks for sacpegoats.... it's open hunting season!
  • You have nailed it John. It may come to lawsuits for homeowners to take back their homes from Zillow.
  • To David G:

    "This marketing for homes and agents is free, so it’s no surprise that as of this writing we have more than 7,700 of them and growing"

    --Rich Barton, December 12, 2006

    hmm.. marketing... sure sounds like advertising to me, David.

    Barton also says 70% of "for sale postings" come from agents and 30% come from owners-- gee, it sure seems like somebody over there knows this stat. Funny that you guys in the trenches don't have access to it :)

    http://tinyurl.com/5zyjg5
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