April 27, 2007: Arizona State vs. Zillow.com will be a lengthy bout
The ongoing saga of Arizona vs. Zillow.com will not end.
When the state Board of Appraisal recently revealed that it had sent cease-and-desist letters to the Seattle Web-based real estate start-up in July and November, it failed to disclose that it had language pending in the Arizona Legislature that would have conclusively outlawed Zillow.com and other consumer-oriented Automated Valuation Methods.
That legislation, Senate Bill 1291, seemed to be on an under-the-radar track to easy passage until its existence was discovered by the LittlePinkHouses.com real estate blog.
The proposed language would have substantially revised Arizona Revised Statutes Chapter 36, among other things defining an appraisal as "an opinion of value."
Does that mean that two neighbors, talking about the price of the house for sale up the street, would be in violation of appraisal law?
What Zillow.com and other AVMs do is so far removed from what an appraiser does that in order to outlaw Zillow, the drafters of the legislation apparently found it necessary to outlaw ordinary free speech altogether.
Importantly, there have been no consumer lawsuits or Board of Appraisal complaints in Arizona against Zillow.com, nor has the Board of Appraisal moved against other consumer-oriented AVMs operating in the state.
A compromise was sought by Rep. Michele Reagan of Scottsdale. She proposed three amendments, one of which would have restored consumer-oriented AVMs to a state of unquestioned legality:
"An Internet website that gives a free opinion as to the value of real estate, if this opinion is not referred to as an appraisal" would have been exempted from the Senate legislation.
But this revised version of the bill did not pass by the necessary two-thirds majority in the House.
In consequence, the existing version of ARS Chapter 36 is still in force.
The Board of Appraisal and the Attorney General's Office argue that Zillow.com is in violation of the standing law. Zillow.com argues that what it is doing is perfectly lawful. And the website continues to provide its "Zestimates" for Arizona properties.
Greg Swann is the designated broker for BloodhoundRealty.com, a full-service Metropolitan Phoenix real estate brokerage. This article originally appeared in the West Valley regional sections of the Arizona Republic.
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