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Zillow hit with lawsuit over home value 'Zestimates'


A homeowner has filed a lawsuit against online realty website Zillow, arguing the company’s unpopular “Zestimate” function repeatedly undervalued her house by as much $64,000, creating a “tremendous road block” to its sale, according to an article in Wednesday’s Washington Post.

The lawsuit was filed in Cook County Circuit Court by a Glenview, Illinois, real estate lawyer Barbara Andersen and alleges that despite Zillow’s denial that Zestimates constitute “appraisals,” the fact that they offer market-value estimates and “are promoted as a tool for potential buyers to use in assessing (the) market value of a given property,” shows that they meet the definition of an appraisal under state law, according to the article.

The lawsuit argues that Zillow should be licensed to perform appraisals before offering such estimates and should obtain “the consent of the homeowner” before posting them online for everyone to see. At issue is that Ms. Anderson’s automated “Zestimate” home price of $562,000 — she has her home priced at $626,000 — apparently used sales of newly constructed houses from a different and less costly part of town in valuing her townhouse, she told the Post.

Ms. Andersen said she is considering bringing the issue to the Illinois attorney general because it affects all property owners in the state, the Post reported. She has also been approached about turning the matter into a class action, which could touch millions of owners across the country, according to the article, which states this may be the first lawsuit of its kind.