Zillow "Zestimate" in Trouble?

Although they say, "Any press is good press," Zillow hasn't received "good press" as of late. Back in May, a class action lawsuit was filed against Zillow.

The claim alleges that Zillow's Zestimate system, their platform for providing home valuation estimates, is inaccurate. If the inaccuracy is proven in court, damages can be award to the plaintiffs on the grounds that this inaccuracy hurt their bargaining position, and in some cases, sales price, during home closings.

In response to these claims, the Chicago Tribune writes, "Zillow has stressed that its Zestimates should be used as a starting point for what a property is worth." So instead of home sellers and home buyers basing their actual pricing on a Zestimate, they should merely factor it into play, along with other variables affecting a home's valuation, such as recent improvements.

But a more long-term solution may be available.

The Motley Fool writes, "The company is looking to crowdsource an improvement to the accuracy of its "Zestimates" just weeks after a class action lawsuit was filed over the flaws in its proprietary algorithms."

By doing so, this would be the first time Zillow is releasing a portion of its proprietary data available to non-Zillow employees. While this obviously can be risky, the one million dollar payout would be rather difficult to turn down.

For more information on Chicagoland real estate closings, contact Michna Law Group by phone at 847.446.4600 or by email at BJM@MichnaLaw.com.