Hat tip to AZKevan for this Arizona Republic article:
An Arizona regulatory board has ordered Zillow.com to stop offering its online estimates of home values.
The Arizona Board of Appraisal has issued two cease-and-desist letters to the popular real estate Web site, claiming Zillow needs an appraiser license to offer its "zestimates" in Arizona.
"It is the board’s feeling that (Zillow) is providing an appraisal," said Deborah Pearson, Board of Appraisal executive director.
I love the Zillow website. I use it a lot. [No they don't pay me to say that.] I do not use their "Zestimate number," which is Zillow’s estimate of a property’s value. I do like their information on square feet, price history and recent sales in the area. Zillow is the best tool I know for individuals to determine a GENERAL idea of what a property is worth, without consulting a professional.
The "Zestimate" is not an appraisal- their website clearly states:
The Zestimate™ (pronounced ZEST-ti-met, rhymes with estimate) home valuation is Zillow’s estimated market value, computed using a proprietary formula. It is not an appraisal. It is a starting point in determining a home’s value.
I suppose there might be people who believe the "Zestimate" to be the final authority on a property’s value, and make either a purchase offer or list a home according to that value. Then again, buyers and sellers might use "How much Joe next door got last summer" as a guide, or consult a Ouija board. That’s one of the reasons Arizona law requires a REAL appraiser to get involved before closing–to hopefully protect the clueless. [OK, given some of the inflated appraisals that have been given in the last few years, a lot of people probably would have been better off with a Ouija board, but that's a post for another day.]
I loved this comment on the Phoenix Real Estate Guy’s website:
This is just plain idiotic and asinine.
Have cease and desist letters also been delivered to Coldwell Banker, Bank of America, Domaina (Lending Tree), Devenio, National Property Value, Homegain, Home Appraisals USA, RealEstate.com, or any of the other similar sites offering automated valuations that are scattered all over the Internet?
Have cease and desist letters been delivered to all of the 47,675 licensed real estate agents and brokers in the Phoenix area? I’m assuming they all offer free CMAs (Comparative Market Analysis). Let’s be ridiculously generous to the Arizona Board of Appraisal and assume only a fourth of the licensed agents offer such a service (and I’m certain it’s significantly more).
Two cease and desist letters down, 11,989 to go.
Hey Arizona Board of Appraisals- you’d better make that 11,990- I’ve made an estimate or two myself. Frankly though, if you really want to achieve your stated mission:
Funny! Even the ARMLS has a CMA tool that can be used by licensed agents. Homes are evaluated based upon recent sales, pricing per square foot and so on.
Zestimates are crap and anyone who uses them to make a business or purchase decision is crazy. Zillow only grabs about 1 out of 4 closings in a specific area and the data is out dated. If you want real data go to http://www.metrohousingreports.com and get a custom report.