John Cook reports that Zillow has gotten itself into hot water about its home valuations:
The National Community Reinvestment Coalition, a Washington, D.C.-based nonprofit that promotes equal access to credit and capital for underserved communities, has filed a 12-page complaint (PDF) against Zillow with the Federal Trade Commission.
You can read the full complaint here. [PDF]
The crux of their complaint is that Zillow’s valuations are misleading and place the “American dream of homeownership at risk.” According to the NCRC, some real estate and lending professionals have been using Zillow’s Zestimates to defraud consumers.
Zillow, for their part, have not responded publicly to the charge, as far as I can tell. Their Press Room and blog remain quiet on the issue currently. They have however, announced they’ve opened their API to all web sites today.
This is a fairly serious allegation in my opinion, and from a PR perspective, one that they should be fairly aggressive in countering.
Not being any kind of legal expert (heck, I’m a marketer after all), I will defer to others to pass judgement on the merit of this complaint.
UPDATE: Amy from Zillow emailed me with their statement:
We believe these allegations are groundless. As we say consistently and prominently on our Web site, Zillow is a free research tool for consumers, and Zestimates are designed to be a starting point for consumers who want to learn about the value of homes. We make every effort to explain on our site the role of Zestimates as a research tool, as well as to clearly display our rates of accuracy for every area we cover.
