Have the cows come home? Is hell freezing over?? Greg has not been shy about saying what he thinks of Zillow‘s Automated Valuation Method (AVM) — and I’m not about to spend an hour linking to every one of his Zillowish posts. Here is the “main attraction” For more, just read his blog, you should be subscribed to it anyway, it’s brilliant.
What would compel Greg to defend Zillow?
This little gem:
NCRC Files FTC Complaint Against Zillow.com
October 26, 2006 – Today, the National Community Reinvestment Coalition (NCRC) filed a consumer protection complaint to the Federal Trade Commission (FTC) alleging Internet financial services and real estate provider Zillow.com is misleading consumers, real estate professionals and financial service providers in on-line home valuations.
Greg states the case FOR Zillow far more eloquently than I ever could. So I’ll be brief. The NCRC’s complaint is completely without merit. One could in fact, say simply this — it’s crap.
“Misleading” consumers, real estate professionals and financial service providers? That’s an insult to the intelligence of pretty much everyone. Who in their right mind believes that software can give a 100% accurate assessment of a home’s value? Even Zillow themselves say they can’t, right on their web site (albeit, it’s pretty deeply buried and you have to go looking for it):
How do you know the Zestimate is accurate? How accurate is it?
The Zestimate is a starting point to help a consumer figure out the true value of a home ”” like a Kelley Blue Book for homes. Working with the Zestimate, consumers can create their own estimate using the My Estimator tool, adding things they may know about the home but we don’t, such as remodeling information. Our data shows us that the vast majority of Zestimates are within 10 percent of the selling price of the home. (See our Data Coverage and Zestimate Accuracy table to determine how accurate it is in your area.)
And this is available if you get a “Zestimate” and click on “What’s This” and then click “learn more” and scroll way down the screen..
How accurate is the Zestimate overall?
Our data shows that the majority of our Zestimate home valuations are within 10% of the selling price of the home. Of course, to a certain extent this depends on the accuracy of the home data we receive; see our Data Coverage and Zestimate Accuracy table. (You can refine the Zestimate using the “My Estimator” tool, adding things you may know about but we don’t, such as remodeling information.) When it comes to unique homes (e.g.,luxury mansions, unusual designs) we are less accurate in our Zestimates
OK, so Zillow knows they aren’t 100% accurate. Yes they bury that fact. But anyone of average intelligence should know that it’s not 100% accurate. Sorry, but I feel no sympathy for the person that buys or sells a home based only on a “Zestimate” and loses money. Doing that is just plain foolish.
Personally, I grow weary of all the disclaimers that companies have to put on their products to protect the stupid and prevent frivolous lawsuits. Coffee is hot. Knives are sharp. You should just know not to rock a Coke machine back and forth because it could fall on you. And you should know that if it does, it’s going to hurt. My favorite product disclaimer is on the sun screen I place in my car windshield to try to keep the inside temperature of my car from reaching 800 degrees in the summer. It says, “Caution, remove before driving”. Well no kidding.
What the NCRC needs to do is drop this silly claim. What Zillow ought to do is just cave and join up with all the other disclaimer wielding companies and slap a “CLICK HERE FOR ACCURACY” statement across the home page and every Zestimate. Should they HAVE to do it? No. But in light of today’s litigious society, I guess they have no choice.
This NCRC/Zillow war is all over the blogosphere. Examples can be found all over the place.