Zillow, with its easy to use, online, proprietary formula for a property’s estimated market value — a “Zestimate” – is being sued in Cook County, Illinois for misrepresenting property values and negatively affecting sales. Real estate agents around the country have been complaining for years about Zestimates interfering with sales. The plaintiffs’ attorney, Barbara Anderson, first filed her own suit against Zillow for what she considered to be an unfair estimate on her own townhouse, impeding her ability to sell it for actual value. She was trying in vain to challenge Zillow’s incorrect information about her own home. However, she dropped her own suit in favor of a lawsuit filed in May 2017 on behalf of a home builder. Zestimates value the builder’s new homes at less than the cost to build, making it difficult to sell the properties. The suit is filed as a class action for all current owners of real property in Illinois for which Zillow has made Zestimates. Patel v. Zillow Group, Inc., Cook County Circuit Court 2017-CH-07117. The suit claims that a Zestimate is an unlicensed appraisal in violation of the State’s appraiser licensing act, that it is an invasion of privacy to publish property values without the homeowner’s consent, that the values are in violation of the State’s consumer fraud and deceptive trade practices act, and seeks an injunction, actual and punitive damages, and attorney’s fees.
In June 2017, Zillow filed a motion to dismiss the suit on the grounds that Zestimates are constitutionally protected free speech. Zillow has stated that Zestimates are not appraisals, but rather a “starting point to determine a home’s value” and that nationally Zestimates are within 5% of the sales price more than 50% of the time.