Zillow's real estate 'Zestimates' under fire - Spokane, North Idaho News & Weather KHQ.com

Zillow's real estate 'Zestimates' under fire

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SPOKANE, Wash. -

If you're selling a home, it's probably something you check. If you own a home, you might just check it out of curiosity. And if you're buying a home, you're definitely going to check it out. We're talking about the home's "Zestimate." 

The Zestimate is a home's value based on real estate website Zillow's estimation. Zillow says the estimates are based on a proprietary formula based on publicly available data. Earlier this month, an Illinois real-estate broker filed a lawsuit based on the Zestimates and their accuracy. 

The lawsuit says that although Zillow cautions users not to take the estimate as an appraisal, the agent says has the same effect. She's essentially saying that potential buyers will look at the Zestimate compared to the actual market price of a house and be misled. That lawsuit was eventually dropped, but a second one was filed, this time seeking class action status on behalf of several Chicago-area builders that could "consist of millions of homeowners,” and seeks an injunction preventing Zillow from publishing Zestimates for the time being.

Zillow says the math isn't perfect, but according to the Washington Post, the company says Zestimates are within 5% of the actual sale price about 54% of the time, within 10% of the sale price about 76% of the time, and within 20% about 90% of the time.

A recent article by the Seattle Times figured that Zillow’s median error rate, applied to Seattle’s median home price, will be off by about $40,000 in either direction.

Zillow has actually launched a competition the public can enter to develop a model and algorithm to improve the Zestimates. The competition runs through January 2019 and the winner gets $1 million.

Have you sold or bought a home in the Spokane/Coeur d'Alene area recently? Did you use Zillow and their Zestimate tool? What was your experience? Tells us about it on our Facebook page. 

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