A class action lawsuit filed against Zillow claims the real estate site’s estimate on the value of homes violates consumer protection laws.
The suit, filed in Chicago, calls Zillow's estimates, or "Zestimates," illegal appraisals and criticizes the company for posting the estimates without getting consent from the homeowners.
In the Bay Area, Zillow's estimates are drawing fire from both real estate agents and homeowners.
Brian Demers, who is selling his Bay Area home, admits to checking Zillow to get an idea of what his house is supposed to be worth. But Demers said Zillow undervalues his home.
Meanwhile, real estate agent Holly Barr said "Zestimates" often overvalue homes.
The lawsuit claims Zillow “should not be engaging in this business practice without a valid appraisal license and, further, the consent of the homeowner.”
In a statement, Zillow said, “We believe the claims in this case are without merit."
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“We always say that the Zestimate is a starting point to determine the home’s value, and isn’t an official appraisal," the statement read.
The real estate website’s information page on the Zestimate said its accuracy “depends on location and availability of data in an area.”
“Some counties have deeply detailed information on homes such as number of bedrooms, bathrooms and square footage and others do not,” the page reads. “The more data available, the more accurate the Zestimate.”
A spokesperson for Zillow added that the company tells homeowners looking to sell their property "if you're serious about selling your home you should work with a qualified real estate agent."
According to Zillow’s site, the company claims the Zestimate has a national median error rate of 5 percent.
