Clearing the 'Zmoke' in the Air

At the core of any offering should be a clear understanding of the offering for the consumer. I have often wondered how so little in the way of disclosure is made to consumers involved in all aspects of the real estate transaction. What do you get for what cost? Who does what best? Who are the true professionals and how does one find them?  Who should the consumer rely upon for accurate information? And that brings to mind Zillow.

There seems to be a lot of smoke around what Zillow is and is not and I would hope Rich Barton and company take the opportunity to clear the air of what seems to be much developing "fire" and "zmoke."  (See Inman News story, "Arizona asks Zillow to cease real estate Zestimates.")

Why? Heaven forbid if the government were to get involved here. Think what was done in the cigarette industry by the surgeon general and the governmental requirements for warnings. Why? Because the industry players refused to do it without such mandates, not to mention the related lawsuits. Check out this U.S. Code forced on the cigarette industry to disclose the dangers of smoking and to protect the consumer from harm.

A misleading Zestimate of value can be harmful to the consumer for many reasons. If a Zestimate is just an estimate and it differs in any way from the valuation derived from an appraisal, a competitive market analysis a contrasting automated valuation model or any other means to determine the true market value of real estate then I suggest you very clearly state your case Zillow before someone else forces your hand.

That goes for licensing, varied measures of current market conditions, cost factors, existing competition of other listings, local economic factors and trends and the list is endless. Anyone in the business of real estate brokerage knows very well that a Zestimate is a far cry from an accurate and current evaluation of the market value of a home. The only question for Zillow now is does the consumer fully understand the fact that Zillow is really not placing a viable current "value" their home? 

I suggest that at the consumer level there is a considerable amount of confusion. There are too many differences in valuations and those making the values to clearly understand the differences. The real fire in all this will result from misleading the consumer. Then the government will step in (let's not forget RESPA and the current DOJ lawsuit with NAR) to straighten things out!

And as for going forward? Zillow might want to consider the use and prominent display of an even more descriptive disclosure statement and a clear disclaimer of what a "zestimate" is and, clearly what it is not. A good old legal overkill here would not hurt the cause, mirror those FDA-type warnings. If there is still some doubt, no worries, just wait long enough and the government will likely take care of this problem all on its own.

--Ken Jenny, TranCen

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