Automated property valuation service and Real Estate powerhouse Zillow has been named as one of eight defendants in a lawsuit by First American CORELOGIC. First American Corelogic claims to own the patent on formulas that Zillow and other companies use to do automated property valuations. Seven other companies were also named in the lawsuit, but Zillow is the name most consumers will recognize. All of the other companies named also use the instant valuation formula for doing BPO's and other online instant property valuations.
Zillow has responded that they are not intending to change any portion of their business model at this time. The suit, if successful, requires the parties named to cease the use of their patented model and to pay any damages to First American Corelogic.
Will Zestimates be a thing of the past?
Personally, like most agents, I think Zestimates ZUCK!
They do not use anything even remotely similar to any form of USPAP appraising standards, and leave out MANY things that effect the value of property. A perfect example is a street of waterfront homes. One side of the street has water access, the other side doesn't. With the "Zestimate" system, it takes an average of ALL of the properties in the area. With this model, homes across the street from the water are valued higher, and homes ON the water are valued less! There are also states like Texas that are Non Disclosure states, and Zillow can't pull current data on properties! Just a little personal pet peeve of mine. There are also MANY items that they don't give adustments for, not to mention that the public records they pull data from are notoriously incorrect. Way to many consumers place too much value on these automated valuations. Anyway, lets see how this thing pans out with this lawsuit!
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