Judge rejects challenge to Zillow’s price estimates

CHICAGO – A lawsuit aimed at stopping Zillow from estimating home values on the popular website has been dismissed by U.S. District Court Judge Amy St. Eve.

The lawsuit claimed that Zillow acts like an appraiser because it lists what it calls Zestimates of homes that are for sale. Zestimates place a market value on such homes. The plaintiffs in the lawsuit claimed that those estimates injured them as they tried to sell homes because Zillow gave their properties lower values than the asking price.

For example, plaintiff Vipul Patel claimed in the suit filed in May that his Schaumburg property was on the market for $1.495 million, yet the Zestimate was just $1,068,677.

Attorney Barbara Andersen argued in the case that the practice of listing values without being a licensed appraiser was fraudulent and that Zillow’s estimates confuse people. Representing home seller Patel and three other property owners, she had hoped to have the case declared a class action on behalf of all owners of Chicago real estate listed on Zillow.

Zillow, however, claimed that its website makes it clear that it is not providing appraisals. Rather, Zillow said, the automated system is simply providing an estimate based on property records such as sale prices, home characteristics and home price appreciation in the area. The word Zestimate, itself, conveys that the values are merely estimates, Zillow said.