Best Guess: US portal giant wins dispute over automated ‘valuation’ tool

An interesting case in the US has been examining the role of a major portal’s automated “valuation” tool, after homeowners took umbrage with the figures.

A set of vendors in Illinois claimed Zillow’s “Zestimates” had underclubbed the value of their homes – in some cases by “hundreds of thousands of pounds” – and thus affected their chances of bagging a sale.

They ended up taking the tech giant to court, with the homeowners arguing that Zillow had “unilaterally imposed its opinions on the value of homes without the consent of homeowners”. Attorney Barbara Anderson told Reuters: “It impairs people’s ability to sell their homes because the estimates do not comply with recognized appraisal standards, and some are way too low”.

The set-to has ended up going the portal’s way though, with Judge Amy St. Eve ruling that the word “Zestimate” was “an obvious portmanteau of ‘Zillow’ and ‘estimate’”, which itself indicates they are “merely an estimate of the market value of a property”. Described as a “mere starting point”, St. Eve said the figures are unlikely to cause confusion amongst buyers and pointed out Zillow’s disclaimers, which make it clear that they are “not official appraisals”.

Zillow – which has around 178m users – claims to have improved the error rate of its Zestimate algorithm, from 14% in 2006 to the current level of 5%

This is unlikely to be the end of the story, however – there’s talk of a repleading, with one of the claims involving an alleged “invasion of privacy” over the posting of properties without the owners’ consent…