Your edge in Real Estate?

On their website Zillow makes the following claim, In Big Print at the top of the page
Free, Instant Valuations and Data for 67,000,000+ Homes
A little further down the page Zillow tells us why we should use them
Why Use Zillow
>Buyers: Compare values to avoid overpaying
>Sellers: Use our tools to help set a price
>Owners: Track your most important asset
That seems like a simple, straightforward and unambiguous claim.
But a lot has been written about the claims that Zillow makes, and much of it has called the accuracy of those claims into question. I did a post about it back in August new ways to value your home, and your neighbors and I netted out by saying ...I think that at this point these are interesting, innovative services that are fun to play around with, and that may be useful in providing a broad value range. But I also think that Zillow and Reply should back off on the claims they each make on their homepages...or at the very least provide a big warning on the homepage that advises people that these valuations cannot be counted on to be accurate - Do Not make financial decisions based on them. It's too important.
And now, from RealtyTimes via Yahoo
Zillow Gets FTCillowed
...the National Community Reinvestment Coalition (NCRC,) which has just filed a consumer protection complaint to the Federal Trade Commission (FTC) alleging that "Internet financial services and real estate provider Zillow.com is misleading consumers, real estate professionals and financial service providers in on-line home valuations."
Zillow responds, "We believe these allegations are groundless. As we say consistently and prominently on our Web site, Zillow is a free research tool for consumers, and Zestimates are designed to be a starting point for consumers who want to learn about the value of homes. We make every effort to explain on our site the role of Zestimates as a research tool, as well as to clearly display our rates of accuracy for every area we cover."

I have an awfully hard time with the '....As we say consistently and prominently on our Web site, Zillow is a free research tool for consumers, and Zestimates are designed to be a starting point for consumers...'
The way I read it, all the prominent stuff on Zillow tells the consumer that Zillow is the place to get a valuation on your home or on the home that you would like to buy. Period. I can't find anything prominent that even hints at this kind of explanation or disclaimer anywhere on Zillows homepage. And to my mind the homepage would be an awfully good place to start to say this consistently and a prominent place to say it prominently, if one really wanted people to have this information. Check it out and tell me if I've missed something, Zillow.com. Then I clicked on the next logical place for a Buyer, Seller, or Owner to go from the homepage >Buyers: Compare values to avoid overpaying >Sellers: Use our tools to help set a price  >Owners: Track your most important asset.  And still no prominent or consistent explanation or disclaimer that Zillow is designed to be a starting point, etc, etc. Nothing, Zip, Zero, Zilch. Under Buyers and Sellers I did find these explanations and instructions> Compare the home's estimated value to the asking price. Take the Zestimate with you to open houses. Review comps of nearby homes to arrive at a fair selling price. See what your agent sees. Enter your address to get an idea of what your home is worth. Look at the current estimated market value and other data about your home. Find out how your home stacks up compared to others in your ZIP code.
So, making believe that I was a Buyer or Seller or Owner, I entered a few different addresses of homes in Tucson to get a zestimate. As usual these zestimates were pretty far off real world values, but that aside, I still did not find a prominent disclaimer or explanation. So far, I didn't find any disclaimer or explanation of any kind, prominent or not. Now there are dozens of links in teeny little fonts on the bottom of each page, and elsewhere, and I'll bet the starting point disclaimer is in one of those. But I didn't go clicking through each of them to find it, because they're teeny, not prominent. And the only thing that's consistent is the lack of a prominent disclosure. And that's the problem.

Comments

[David G from Zillow.com]

Hi John, it's David G from Zillow.com.

Transparency is important to Zillow. We take a serious approach to what we do but we also emphasise educating consumers about the limitations of our tools.

Please take another look -- as you should have noticed:
1) Zillow's data and valuation accuracy reporting -- the link is in the search box on the home page -- the most prominent spot on our website.
2) A link that says "What's this" next to the Zestimate on the house's detail page. The text box that link activates says "A Zestimate home valuation is Zillow's estimated market value. It is not an appraisal. Use it as a starting point to determine a home's value. Learn more"
3) A tab at the top of your page that says "How to Use Zillow" -- that organizes help topics simply, highlighting the most important content for buyers, sellers and owners ...

... this list could go on and I haven't even pointing out the links at the bottom of the page yet. Ours is a complex site -- and there's detailed information available for passionate real estate enthusiasts but we have also made the most valuable snippets of that information readily available to the casual visitor.

[John Schneider]

Hi Dave G.
I've been MIA for a few days and so have been very remiss in responding to your comments regarding my post 'Your Edge in Real Estate’
I think it’s generally recognized that Zillow arrived earlier this year with great fanfare and high hopes from many people based on the promise of-
Free, Instant Valuations and Data for 67,000,000+ Homes.
Not- ‘Free, Instant Approximate, or Starting Point, Valuations and Data for …, and depending on your area these valuations will fall within a 10,20,30 or 40% range of accuracy.’ Just Free, Instant Valuations …
Followed by, (…and you don’t have to enter any personal information and no one will contact you) Might this imply that Zillow has all the information that you might need, all the information that is necessary to arrive at these instant valuations. And that there’s No need to be bothered with the nuisance, or the expense of consulting with a Realtor or Appraiser or other knowledgeable individual regarding property values.
This is further reinforced by,
>Buyers: Compare values to avoid overpaying
>Sellers: Use our tools to help set a price
>Owners: Track your most important asset
As I said, these are simple, straightforward and unambiguous claims.
The problem is that it is not so. A Buyer, Seller, or Owner cannot use Zillow to- compare values to avoid overpaying, or to Use our tools to help set a price, or to track your most important asset. People cannot do that on Zillow, not with a reasonable degree of accuracy and reliability. And as I read it, accuracy and reliability are implied in those claims that Zillow makes prominently and consistently on the website. And Zillow has not shown that it can back up those claims with a reasonable expectation that the results are accurate and reliable.
Yes David, I understand that the numerous links and resulting fine print cover all the necessary disclaimers required to back peddle on the prominent and consistent claims.
But this is not chewing gum or soft drinks that Zillow is selling, ‘Makes Your Teeth sparkle’, ‘Coke is it’. This stuff is more important to people’s lives and livelihoods.
The problem for Zillow and the reason it has caught the ire of so many, is that Zillow has from the very beginning over-promised and under-delivered and continues to stubbornly refuse to prominently and consistently level with the public about what it can and cannot do. The result is that Zillow has become the subject of ridicule rather than high hopes, and along the way has lost much of its promise and sparkle.

[jf.sellsius]

It has always struck me as odd that Zillow will say it has a disclaimer but refuse to put it prominently or conspicuously on the home page. What's the big deal? In some states it is mandatory for a CMA to have a non-appraisal disclaimer on the front page. I understand an AVM is not a CMA but why does a computer (Zillow) get a pass while a professional who visits the property does not?

You have to ask yourself WHY they they don't want the disclaimer on the home page. The answer seems to me that they fear it will drive away customers when in fact they will endear consumers for their honesty and gain some respect from the real estate community.

Zillow does well by the consumer in giving data & it has tried to get consumers to cover the holes in that data but to stubbornly hold to this position makes no sense unless you have done market studies to convince you that it would harm your business model.
Just my opinion.

[John Schneider]

JF, The big deal for Zillow, is that Zillow is doing everything they can to keep the ball in the air, because that's where the game is.
While it's in the air, no one's going to get a hot dog or a coke -cause everybody's watchin' the ball.

[jf.sellsius]

Very solid points John. The promises to buyers & sellers (to compare values so as not to overpay & to help price your home---big consumer WANTS) are shouted at the point of first consumer contact but the "backpeddling" disclamers are whispered (you have open the "what's this" door NOT a "disclaimer" door.)

Daid G. ---is there a reason for NOT having the disclaimer on the home page? Has the question ever been answered? Having that answer may appease us lowly bloggers who think it's a big deal for consumers. HAve any consumer studies been done to see if consumers are getting the disclaimer?