A group of home-sellers in Illinois on Thursday appealed a federal judge’s decision dismissing a lawsuit over Zillow’s Zestimate tool.
U.S. District Court Judge Amy J. St. Eve tossed the lawsuit last week — for the second time — after shooting down arguments made by the home-sellers that Zillow markets Zestimate as a reliable home valuation tool, though they allege that it is often inaccurate and difficult to get changed. The new document, filed by the home-sellers’ attorney Barbara Andersen seeking to take the case to the Seventh Circuit of the U.S. Court of Appeals, does not make new claims against Zillow but summarizes prior arguments in the case.
“I believe that the Zestimate is a scam to lure people into Zillow’s website and is purposefully confusing so that homeowners feel compelled to retain brokers (who pay Zillow for advertising/leads) to solve a problem that Zillow created,” Andersen told GeekWire in an email.
Andersen added, “I filed the appeal because I believe that the trial court erred and, further, I do not believe that Zillow should be allowed to continue on with this practice. I also am continuing on because no government body has yet to take action despite being presented with the issue for many years.”
Zillow issued the following statement in response to the appeal:
The court has already dismissed the plaintiff’s claims about the Zestimate not once, but twice, and we are confident that her claims will again be found to be without merit by the Court of Appeals. The Zestimate is a sought-after and valuable free tool for consumers, and as the lower court’s ruling noted, the Zestimate is very clearly not an appraisal. Its intended use is right there in the name: it’s an estimate of a home’s value, to be used as a starting point. We’ll continue to vigorously defend ourselves against the plaintiff’s allegations.”
Over the years, the Zestimate tool has served as a source of contention from home sellers expecting to get more, home buyers expecting to pay less, and real estate professionals wishing they weren’t caught in the middle. Zillow co-founder and executive chairman Rich Barton called the Zestimate “very provocative and personal and a little voyeuristic” in a 2016 GeekWire interview discussing how the company came up with the tool.
Zillow consistently refers to the Zestimate as just one data point that consumers have access to when considering buying or selling a home — along with information such as recent home sales and guidance from real estate professionals. Zillow explicitly points out that Zestimate does not constitute an appraisal and is what it sounds like, an estimate. Launched in 2006, it marked the first time that homeowners gained access to estimated home values — data that was previously only available to real estate agents, appraisers and mortgage lenders.