We often warn our clients to beware of online real estate companies that offer computer-generated estimates of home prices. Values will always vary widely according to the unique qualities of the home and its neighborhood—qualities computer algorithms can’t always take into account.
One such website, Zillow, is now being taken to task for this very issue. Suburban Chicago homebuilders recently filed a lawsuit against the site, claiming Zillow’s estimates are “misleading home buyers with lowball figures.” They assert that the estimates amount to home appraisals and, as such, need “to be conducted by a licensed appraiser,” according to an article on the lawsuit in MarketWatch.
Zillow counters that their estimates are not official appraisals, but just “a starting point to determine a home’s value.”
Whichever side prevails, it’s up to consumers to understand that only an in-person appraisal can offer an entirely accurate home valuation. As one broker notes: “An agent is obviously going to have firsthand market knowledge and can advise their client about what the property is really worth.”