Zillow scores a win in New Jersey lawsuit over Zestimates

A judge dismissed a suit over the company’s policy of obscuring Zestimates for some brokerages

TRD New York TRD WEEKEND EDITION /
Mar.March 08, 2020 09:00 AM
CEO of Zillow Richard Barton (Credit: Zillow and iStock)

CEO of Zillow Richard Barton (Credit: Zillow and iStock)

Zillow has for now emerged victorious from a two-year-long legal battle over its Zestimate home valuation tool.

New Jersey company EJ MGT sued Zillow in 2018 over the latter’s policy allowing some partners to move the Zestimate valuation to a less prominent position in listings on the site. EJ MGT argued that violated anti-trust laws, but a federal judge has now dismissed the suit, according to Geekwire.

The Zestimate tool calculates a rough value for properties on the platform using public records and accounting for recent nearby home sales and other data. The estimate is usually displayed beneath actual asking prices for those properties that are on the market, which could lead would-be buyers to question that asking price. (In fact, former Zillow CEO Spencer Rascoff just listed his Los Angeles mansion for $24 million, though the Zestimate says the home’s estimated worth is $16.9 million.)

Critics have long-alleged the tool is wildly inaccurate and misinforms potential buyers. EJ MGT alleged that Zillow hides Zestimates from listings at the request of certain brokerages that have contracts with the company. EJ MGT did not have such a contract with Zillow.

Judge John Michael Vasquez concluded that Zillow’s policy of moving Zestimates didn’t hurt EJ MGT’s efforts to sell a New Jersey home at the center of the suit. He appeared to suggest that the Zestimate itself could affect business.

“Presumably, if the Zestimate for the Property was higher than Plaintiffs asking price, then Plaintiff would not be claiming any injury — which leads to the conclusion that it is the amount of the Zestimate, rather than its location, which causes Plaintiffs alleged injury,” he wrote.

Zillow issued a statement that it was “pleased” with the ruling, calling Zestimate “a sought-after and valuable tool… central to Zillow’s commitment to providing people with free and easy access to important real estate data.”

EJ MGT has 30 days to submit an amended complaint. [GeekWire]Dennis Lynch


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