- A lawsuit has Zillow (Z +0.6%) and its "Zestimates" quick home-value estimates in the crosshairs.
- Homebuilders in suburban Chicago say the estimates are stalling sales by providing lowball figures on values, and that the numbers are violating the description of a legal appraisal in Illinois.
- The company replies that the estimates aren't meant to be appraisals, and that its figures are within 5% of the actual sales price nearly 54% of the time (and within 10% of sales price 75.6% of the time, and within 20% of the sales prices 89.7% of the time).
- Zillow calculates the numbers algorithmically using public records and other data -- though tax rolls, for one, can turn out far off prevailing sales prices.
- The new suit focuses not so much on the accuracy but its claim that homebuyers treat the numbers as appraisals even though they don't fit the legal definition in Illinois.