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Category: Zillow.com (page 11 of 13)

November 21, 2006

The Zillow.com shake-down: Deconstructing the NCRC complaint . . .

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Suburban Phoenix Real Estate Broker

Author website

The NCRC complaint against Zillow.com was filed 26 days ago. Today we have the first detailing in the public prints of the bogus nature of the charges (subscription required):

Absent specific instances of harm, the complaint looks more like a scheme to grab some of Zillow’s publicity than a legitimate beef. The fact that the coalition didn’t contact the company about its concerns before it filed the complaint also looks suspiciously like grandstanding or a fishing expedition.

Worse yet, the Center for Responsible Appraisals and Valuations, an offshoot of the coalition, reportedly has hired a third party to offer an automated valuation model and site-visited appraisal services through one of the coalition’s own Web sites. That makes Zillow a competitor of the coalition.

The complaint also fails to explain why Zillow would be at fault if its inaccurate estimates were used to mislead low-income or minority buyers as the coalition contends. That’s important because it isn’t bad data, but rather, bad actors who should be held responsible for harm to the public. And thus it’s not Zillow, but rather, unethical realty and mortgage brokers who should be prosecuted when fraud or other crimes occur. And that’s true regardless of whether or not the victim happens to be of a low-income or minority group.

Moreover, where is the evidence that any other estimates of home values are more accurate than Zillow’s? After all, homes are sold every day for substantially more or less than the asking price due to multiple offers, price reductions and negotiation between buyers and sellers after homes are put on the market. Are sellers’ asking prices harmful to the public because they don’t necessarily present an accurate representation of a home’s value? Any estimate of value is by definition an opinion.

In the best of all possible worlds, inaccurate data wouldn’t exist or be tolerated. And yes, Zillow would be a better service if its estimates were more reliable. Yet, no one is obligated to use Zillow for any purpose whatsoever, and if the service offers little or no real benefit, so what? Until the coalition comes forward with specific instances of actual Read more

November 19, 2006

Reagor-mortis? On-the-spot real estate news coverage only a few weeks late . . .

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Suburban Phoenix Real Estate Broker

Author website

October 26th: NCRC files specious complaint against Zillow.com.

November 19th: Crack Arizona Republic real estate reporter Catherine Reagor yawns, burps, goes back to sleep:

The popular Web site zillow.com gets a lot of hits as people frequently check the values of their homes and their neighbors’ in the fast-changing housing market.

But not everyone agrees with Zillow’s figures. I have received several calls and e-mails from people questioning its data. The National Community Reinvestment Coalition agrees. The Washington, D.C.-based non-profit has filed a complaint with the Federal Trade Commission saying Zillow’s home-valuation tool is inaccurate.

Further deponent sayeth not.

Reagor was in love with Zillow when it was brand new, but this was because she hadn’t bothered to test it. The idea of reporters actually checking things seems to have died with Hildy Johnson…

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November 13, 2006

Avid AVM aversion extends only to Zillow.com: NCRC off-shoot starts competing on-line valuation service . . .

by

Suburban Phoenix Real Estate Broker

Author website

Curiouser and curiouser. Could it be that NCRC’s motive is not to shake-down Zillow.com but to sully its reputation, in advance of going into competition against it? From InmanNews (fingered by Jim Duncan of Real Central VA):

Zillow officials say their valuations should also be seen as a starting point for consumers who want to learn more about the value of their homes.

But the National Community Reinvestment Coalition, a Washington, D.C., nonprofit, has filed a complaint with the Federal Trade Commission alleging that Zillow does not adequately disclose the degree to which its free automated home valuations can over- or underestimate a property’s value. The site is “likely to cause substantial injury to consumers who rely on the inaccurate representations made by the company,” the complaint alleged.

Zillow officials called the allegations groundless, saying they make every effort to explain the site’s role as a starting point for research, and display accuracy rates for every area covered by the site.

In a confusing twist, a nonprofit group formed by NCRC to promote best practices in the appraisal industry has hired another company, Eppraisal LLC, to provide a service similar to Saris Technologies’ eppraisal.com.

The NCRC offshoot, the Center for Responsible Appraisals and Valuations, is contracting with Eppraisal LLC to operate its www.BuySmartProgram.com Web site, which offers consumers appraisals using an automated valuation model in conjunction with the services of an appraiser.

NCRC vice president David Berenbaum said there is no contradiction in NCRC’s complaint against Zillow and CRAV’s use of an AVM on the www.BuySmartProgram.com Web site.

“The product being offered is an appraisal involving a site visit. It is not limited to an AVM,” Berenbaum said. “We do not have a problem with accurate AVMs, especially if they are combined with (the services of) an appraiser.”

Berenbaum said Eppraisal LLC is a subcontractor with no influence over policy decisions at NCRC or CRAV.

Based in Mayfield Heights, Ohio, Eppraisal LLC offers access to a network of 10,000 appraisers through its Web site, www.uappraiseit.com.

Scott said the term eppraisal has not been trademarked, and that Saris and its www.eppraisal.com service have no ties to Eppraisal LLC.

Another unrelated company with a Read more

November 3, 2006

The Zillow.com shake-down: At last a discouraging word about NCRC . . .

by

Suburban Phoenix Real Estate Broker

Author website

All right, it might be a little naive, but it’s something. From the Square Feet Blog at the San Jose Mercury News:

So why has the NCRC decided to announce that Zillow is putting the American Dream in peril? What do you think? Genuine concern for consumers, or or just pining for some publicity? Perhaps a little of both, but my instincts go with the latter explanation.

Publicity is the means. Lucre is the end, I remain convinced.

But: Here’s another chance for someone with access to a Lexis/Nexis database to investigate NCRC.

Here is the pattern I see in NCRC news stories:

1. “Scandalous” situation announced, some sort of formal action initiated.

2. Parties meet.

3. Settlement announced with NCRC getting funds from formerly “scandalous” party, now cleansed/absolved by affiliation with NCRC.

It would be a wonderful thing for Zillow.com and the entire dot.com world if a reporter would look beyond the words “non-profit” to find out how NCRC is funded…

Our story so far:

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November 2, 2006

Defending Zillow.com . . .

by

Suburban Phoenix Real Estate Broker

Author website

Picture yourself living in Boston, Massachusetts, where the climate is six months of drizzle and mud followed by six months of deep snow and permafrost. Let’s say it comes to your mind to bid a final farewell to all things wintery and shuffle off to the endless, boundless, soul-enriching sunny skies of Phoenix, Arizona.

This is a rare adventure that only happens about 200,000 times a year, so you’ll want to do some preparation. So you put on your long underwear and your clothes, your overclothes and your overcoat, your socks, oversocks, shoes, overshoes and snow-boots, your gloves, your overgloves, your hat and your overhat, and you grab your umbrella and layer on a scarf or two for good measure and then you trundle out into the permafrost to face the day.

You waddle your way over to Out Of Town Books in Harvard Square and buy a copy of Phoenix Magazine. The photos are astounding — mountains, deserts, golf, tennis, spectacular sunny skies and stunning women in skimpy sun-dresses. If you’re looking for everything Boston isn’t, you’ll find it in the pages of Phoenix Magazine.

But: Is this adequate preparation for a transcontinental relocation? I really like Phoenix Magazine, and I have a client who is an Associate Editor there, so I have even more reason to like it. But there is a big difference between thumbing through one issue of Phoenix Magazine and making detailed plans to move from Boston to Phoenix.

Who could doubt this?

I’m being very serious. Even if someone could be so impulsive as to move from Boston to Phoenix on a whim, goaded by a photograph in a magazine, would even that will-o’-the-wisp conflate impulse with planning?

The answer is obvious, isn’t it?

This is how we can know with a certainty colder than the wrought iron railings of Beacon Hill in Olde Boston Towne that the complaint brought against Zillow.com by the National Community Reinvestment Coalition (NCRC) is completely specious.

Do you see why? There is no possible way that any thoughtful person could confuse a number regurgitated by a piece of software with a responsible evaluation of a home. NCRC Read more

November 1, 2006

The Zillow.com shake-down: The piling on begins — and Spencer Tracy is nowhere to be found . . .

by

Suburban Phoenix Real Estate Broker

Author website

Zillow news since the New York Times story broke:

These are all mainstream news sources, not weblogs, and I omitted the (many, many) duplicates. The Times article was picked up by Reuters and echoed far and wide. The AP article, shown here from the Seattle Post-Intelligencer will have run in hundreds of newspapers and will have been broadcast in abbreviated form on hundreds more television and radio stations.

Devotees of old black-and-white movies may be thinking that Zillow.com will prevail in court. I invite you to reread those headlines. None of this will ever get to a courtroom, and Zillow.com has already lost in the court of public opinion — the only court this “issue” was ever intended to reach.

Apparently, the company’s plan now is to have the meeting with NCRC “in two weeks.” Presumably, Zillow.com thinks it is going to prepare itself in that time for a honest, civilized debate. What will happen instead is that the NCRC will leak a few very damaging sound-bites every day, vilifying Zillow.com for a pervasive white-glove racism in its algorithms. It’s the death by a thousand cuts. By the time the meeting occurs — which I would expect to be quite a bit sooner than “in two weeks” — Zillow.com will be willing to pay anything to stop the loss of blood.

Entrepreneurs can afford to fight this kind of battle — even to the edge of doom. Any business with third-party investors will eventually cave to the will of those investors. Zillow.com might still win this if it comes out hard on the attack, demonstrating by a preponderance of widely-publicized evidence that NCRC is nothing but a shake-down outfit. I would love to see that happen, but I don’t expect it.

Instead, Zillow.com will dither, as it is doing now, thinking Read more

October 31, 2006

Losing your Zest for life? Maybe you need to give yourself a frank eppraisal . . .

by

Suburban Phoenix Real Estate Broker

Author website

The folks behind the RealtyThoughts weblog today launch eppraisal.com, a Zillow-like Automated Valuation Method promising results for 70,000,000 homes. The site is wicked clean, but it wasn’t wicked fast — but I’m willing to cut ’em a break on the assumption that they’re seeing a lot of first-day traffic.

Differences from Zillow:

  • Runs on Safari
  • No ads
  • Looks like the business model will be lead generation
  • Produces a range of values instead of a dubious Dr. Science Zestimate
  • Likes my house better than Zillow does

The eppraisalites (sounds biblical, don’t it?) will be in New Orleans signing up Realtors for the lead generation part of the product.

Give it a try. Same elaborate promises, but without the troublesome lawsuits…

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October 31, 2006

The Zillow.com shake-down: Preparing for the denouement . . .

by

Suburban Phoenix Real Estate Broker

Author website

Via Matrix, The New York Times:

Zillow.com, the Web site that provides free home valuations, has been accused by a coalition of community activist groups of undervaluing the homes in black and Latino neighborhoods.

The headline of the story: “A Home Valuation Web Site Is Accused of Discrimination.” I said the headline would be “Computerized Redlining,” but this is The New York Times, the dignified hand-maiden of the left. In any case, the charges of racism will get more hysterical until Zillow.com either pays up or shuts this shake-down down.

But why is this article in the Times today, when this “news” broke last week? To soften Zillow.com up, to let them know what they’re in for if they resist.

If you want something to be frightened about on Halloween, here it is…

Our story so far:

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October 30, 2006

The Zillow.com shake-down: BloodhoundBlog’s take so far — and a chance to win a BloodhoundRealty.com Tee Shirt . . .

by

Suburban Phoenix Real Estate Broker

Author website

If Inman Blog sent you here, here is our side of the story so far:

A question might arise in a thoughtful mind: Why am I defending Zillow.com from this outrage?

First, because they have the right to run their business however they choose. If I can persuade them to add a disclaimer to their front page, that’s great. If not, it’s still their business, their private property.

Second, and of much greater importance, if Zillow.com caves in to extortion, that will open the net up for raids by every flavor of “non-profit” piracy. It is very rare that anyone can make any difference at all in the way things are done. This is one of those times, a transition point, and what Zillow.com does may have decisive impact on future events. Will the net become another corporate cash-box for “non-profit” groups who will — for a fee — “protect” you from legislation they got passed? Or will the net remain the exception to the way business is done in America?

The Future of Real Estate Marketing has more today, as does Realty Thoughts. For my own part, I believe the crux of the issue is racial politics and Fair Housing legislation, rather than the plights of starving appraisers or disgruntled Realtors. These groups may have their own axes to grind, but every NCRC shake-down I have been able to uncover has been related to Fair Housing law or the Community Reinvestment Act.

These are the three instances I have found, having invested less then ten minutes’ research time:

  1. NCRC routinely shakes-down banks.
  2. NCRC shakes-down lender for red-lining. Note that the article reads like the lender was fined, but the payment actually went to NCRC.
  3. NRT hires NCRC to teach its Fair Housing classes. In this instance, NCRC was the white-hat protector called in to fend off the black-hat protectors.

My belief is that fleas don’t come in threes: If every story I found Read more

October 27, 2006

The Zillow.com shake-down: How the other shoe will drop . . .

by

Suburban Phoenix Real Estate Broker

Author website

Lloyd Frink at Zillow.com is playing CYOA games, and Joseph Ferrera at Sellsius&176; is looking for truth from a horse that’s all ass, but here is how the other shoe will drop, in the Zillow.com shake-down, when it does:

Watch for a joint announcement of something that Zillow.com and NCRC will do together. There will be a window-dressing “solution” to the manufactured dispute, perhaps a more robust disclaimer. This, whatever it is, will be nothing but a show horse. The pay-off will be in the joint program, whatever form it takes.

Clint Bollick or someone like that might file a suit solely in pursuit of a policy change. The NCRC will expect to get money or power or both. They’re playing straight out of the Jesse Jackson playbook, and they will not stop maligning Zillow.com until they get what they want or until their tactics are fully exposed.

It would not surprise me if the payoff came from the personal fortunes of Rich Barton and Lloyd Frink, to keep the VCs and the SEC out of it.

When you see a press release like the one I cited yesterday from NRT, you’ll know the deal is done. Read that press release carefully and you should be able to figure out what the payoff is. Learn to read everything that carefully and you will discover how America works.

There is an alternative: They could stand firm. The web has fairly successfully held itself aloof from the way America works for the rest of corporate America. To my knowledge, this is the first time a purely web-based company has been shaken down in this manner. Because of this — because the web has been exempt from this kind of officious thievery so far — it is a matter of particular moment whether Zillow.com is able to hold the line.

I would love it if they did, but I honestly don’t expect it. Except for people like Steve Jobs and Mark Kuban, corporations are run by cowards. Most likely, they’ll try to save face with a seven-figure bribe, then set up a fund to buy off future pirates, who will Read more

October 27, 2006

Zillow.com shake-down: Creeping disclaimerism as a subject-changing gambit . . .

by

Suburban Phoenix Real Estate Broker

Author website

Whatever. Just don’t pay them off. The issue is a lot bigger than Zillow.com, and Net Exceptionalism is too important an idea to be squandered.

Even if you don’t know who your friends are, I will hang with you if you will hang tough…

Our story so far:

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October 26, 2006

Zillow.com shake-down: This is the first shoe dropping . . .

by

Suburban Phoenix Real Estate Broker

Author website

John Cook, Seattle Post-Intelligencer:

Zillow has contacted the NCRC, and the two plan to meet soon, Berenbaum said. He expressed confidence that they can resolve the issues in a way that benefits the entire home valuation industry.

Actually, the complaint made me think that Yahoo.com is going to have to cough up some dough, too…

Our story so far:

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October 26, 2006

Welcome to Race Piracy 2.0: Zillow.com is targetted for the crime of having deep pockets . . .

by

Suburban Phoenix Real Estate Broker

Author website

Heads up, folks. It’s a shake-down.

Poor Zillow.com has gotten itself caught up in a classic Jesse Jackson-style shake-down. This is specious bullshit, and everyone who cares about justice — and about not having the rest of the net raped by posturing diversity pirates — should line up with the Zestimators.

They should disclose openly that the damn gizmo is a toy — but what moron doesn’t already know this in his heart of hearts? But they’re hoist by their own petard, because their pretense to a vast scientific “accuracy” is what is being used against them.

Here’s the worst of it, Zillow.com will probably wuss out and pay these crooks off, just like Coldwell Banker did.

Welcome to Race Piracy 2.0…

Our story so far:

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October 3, 2006

Zillowing the convergence: ‘Close enough is good enough’ will eventually eat every anti-Zillow argument except the ethical complaint . . .

by

Suburban Phoenix Real Estate Broker

Author website

When I was young, I was convinced I was going to work in either editorial or advertising. I was a teenage photo geek, a Junior Jimmy Olson with thousands of dollars worth of professional photo gear slung over my shoulder. In college, I was publisher of the student newspaper. From the time I was very young, single digits, I was producing all sorts of printed material. And because I often didn’t have a budget, I learned how to do a lot of it by myself.

The net consequence of all this is that, by the time I had to get a real job, I knew how to write, I knew how to create images — and I knew how to do many of the back-end jobs associated with producing printed words and images. I looked at my job opportunities and saw that print production paid a helluva lot better than content creation. So I went to work in Wall Street (where the very best money was found) producing 10-Ks and Blue Sky Reports and Annual Reports. I worked a boatload of IPOs, and 102 weblog posts overnight is not a very big job compared to the 100+ hours of the revision cycle on an Initial Public Offering.

All of this was happening at an epoch we might name The Dawn of the Age of Connectivity. The law firms we worked for had high-end dedicated word processing systems, and they wanted to know why they couldn’t do everything “on disk” — in the dewy-eyed lingo of the day.

It fell to me to do this, mostly because I was interested and no one else was. The “disk” problem was a bear, and there were dozens of kludgey “solutions” to this dilemma over the years. But, understood as a telecommunications problem, mere capture of keystrokes was not that big a problem.

The big problem was expressing word-processed coding as typography — and if you are not fairly well-versed in typography, you are probably already saying, “What’s the difference?” And, indeed, the difference today is much smaller than it was when I was doing this work. Typography once Read more

October 2, 2006

Appraiser reverse-engineers Zillow.com’s “secret sauce”: Can you guess the main ingredient . . . ?

by

Suburban Phoenix Real Estate Broker

Author website

Lee Ovington, a real estate appraiser who works and blogs in Elgin, IL has successfully reverse-engineered Zillow.com’s Automated Valuation Method:

The above examples give us some indication of how Zillow arrives at its value estimates (or Zestimate). Quite simply, the Zestimate relies on a calculated relationship of assessed value to sale price. Zillow merely takes selected transactions and calculates the relationship between the Assessed Values and the Sales Prices. It then applies that ratio to the subject’s assessed value (plus or minus some adjustments) and “whala”, you have Zestimate!

The above examples show that even when Zillow has a large margin of error in its Zestimate of 10-15%, the Zestimate is still highly correlated with the Assessor’s Values. We can conclude from this analysis, that the Zestimate is a derivative of the Assessor’s Values. Zillow may be slightly modifying the data by some weighting or factor like time or distance. That “tweaking” of the data could be the “secret” part of its formula; but clearly, the Zestimate is based on the underlying Assessor’s Values as indicated by the high correlation coefficient.

This is not surprising, by itself. It’s how AVMs work, after all. But by deconstructing Zillow’s results, Ovington demonstrates how little sauce there is in the vaunted “secret sauce”…

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