Zillow sued for concealing Zestimates

Listing service gave some brokers preferential treatment, according to suit

TRD LOS ANGELES /
Jan.January 16, 2018 05:00 PM

UPDATED: Wednesday, January 17, 2017, 11:35 a.m.: Zillow Group has responded to the suit through a spokesperson: “We believe the claims in this case are without merit. The Zestimate is indended to be a starting point for determining a home’s value… [and] we intend to vigorously defend ourselves against this lawsuit.”

Zillow is being sued in New Jersey for allegedly concealing its controversial Zestimate figures on residential listings at the request of brokerages that have “contracts” with the online real estate information site.

The plaintiff in the case, listed as EJ MGT LLC, claims that Zillow violates federal antitrust laws. The suit alleges Zillow hides its so-called home price Zestimates from certain brokerages, and from sellers, according to the online news site the American Genius. EJ MGT LCC appears to be the owner of at least one property for sale referenced in the suit that had its Zestimate prominently displayed beneath its actual listing price.

Zestimates are automated Zillow valuations on properties that use a “proprietary formula” along with troves of data including public records, according to the company. The listing service shows its Zestimate on a property, whether that property is for sale or not.

Critics have long said the system is wildly inaccurate, misleads buyers and slows down or even kills sales.  A buyer might question paying $100,000 more for a property over its Zestimate, and a seller might ask why sell a property for $100,000 less than it should be worth. One broker called Zestimates “the bane of my existence.”

The suit includes a screenshot of a message with a Zillow support staffer, who tells a man named Igor that “due to agreements Zillow has with certain brokerages, Zestimates may not display under the listing price on these brokers’ listings.” The employee claimed she she was “unable to edit or remove the Zestimate” on his listing as the “agreements and modifications” were outside her administrative capabilities, according to the filing.

The suit names a number of high-profile brokerages as “co-conspirator brokers.” They allegedly had contracts with Zillow to hide Zestimates on listings, including Sotheby’s International Realty, Century 21 Real Estate, and the Corcoran Group.

A screenshot of an off-market listing shows the Zestimate prominently displayed, but removed once that property hit the market with a “co-conspiring” brokerage.

In August, an Illinois judge dismissed a separate federal lawsuit filed by homeowners against Zillow, who claimed Zestimates undervalued their homes, making them harder to sell. [TAG] — Dennis Lynch

 

Related Articles

arrow_forward_ios
A map of area from the LA County Fire Department (Credit: Los Angeles County Fire Department Air Operations)

Getty fire remains only partially contained as officials brace for strong winds

Malibu Real Estate Investments principals Bedros Oruncakiel and Kirkor Suri

Malibu spec mansion lists amid softening luxury market

Chandler Parsons and his property on Stone Canyon Road (Credit: Getty Images)

Durant wants out of Malibu, and now Chandler Parsons is listing his Bel Air mansion

CoreLogic's Andrew LePage and Orange County (Credit: Wikipedia)

SoCal housing market shows signs of life, with a caveat: report

Bridge Housing CEO Cynthia Parker and a rendering of the view from Walnut and Anaheim (Credit: SVA Architects)

Fully affordable complex set to rise in vacant Long Beach lot

Tracy Tutor and her Brentwood home

Tracy Tutor of “Million Dollar Listing ” asking a lot more for Brentwood home

Anton Lessine and 321 South Bristol Avenue, and Behati Prinsloo and Adam Levine with their home (Credit: Getty Images and Zillow)

This week in celeb real estate: Adam Levine unloads $45M home, a Hollywood film producer sells in Brentwood…and more

Anton Lessine and 321 South Bristol Avenue (Credit: Getty Images)

Hollywood producer Anton Lessine sells Brentwood Park mansion for $17M

arrow_forward_ios