The National Community Reinvestment Coalition believes inaccurate estimates of residential property values on could inflict substantial injuries on real estate brokers and home buyers, according to a complaint the organization filed last month with the U.S. Federal Trade Commission. The coalition may be correct about Zillow’s inaccuracies, but the evidence released so far doesn’t support vague allegations of actual harm.

Anecdotal reports suggest Zillow’s home-value estimates often miss the mark, sometimes by very large amounts. And indeed, Zillow has stated on its Web site that its estimates aren’t always an accurate representation of market value. It may take a graduate course in statistics to decipher Zillow’s reports and how-to-use instructions, but the availability of such information signals that Zillow isn’t all that accurate in all places. Moreover, a five-minute conversation with a savvy real estate agent (or homeowner in any neighborhood) would reveal as much without the bother of statistics.

Beyond the allegations of inaccurate data, though, the coalition’s argument doesn’t hold up. The 12-page complaint is heavy on concerns, worries and the usual legalese, but doesn’t include the names of any consumers who the coalition claims “are relying on ( for mortgage and real estate transaction information” and who “believe falsely that the comparable information on ( is accurate.” Nor does it reveal the names of any of the “growing number of real estate and lending professionals” who the coalition claims are “using the misinformation on to perpetrate fraud” in the housing markets. Nor is there any rationale as to why Zillow was singled out from among the various companies that provide automated home valuations.

Absent specific instances of harm, the complaint looks more like a scheme to grab some of Zillow’s publicity than a legitimate beef. The fact that the coalition didn’t contact the company about its concerns before it filed the complaint also looks suspiciously like grandstanding or a fishing expedition.

Worse yet, the Center for Responsible Appraisals and Valuations, an offshoot of the coalition, reportedly has hired a third party to offer an automated valuation model and site-visited appraisal services through one of the coalition’s own Web sites. That makes Zillow a competitor of the coalition.

The complaint also fails to explain why Zillow would be at fault if its inaccurate estimates were used to mislead low-income or minority buyers as the coalition contends. That’s important because it isn’t bad data, but rather, bad actors who should be held responsible for harm to the public. And thus it’s not Zillow, but rather, unethical realty and mortgage brokers who should be prosecuted when fraud or other crimes occur. And that’s true regardless of whether or not the victim happens to be of a low-income or minority group.

Moreover, where is the evidence that any other estimates of home values are more accurate than Zillow’s? After all, homes are sold every day for substantially more or less than the asking price due to multiple offers, price reductions and negotiation between buyers and sellers after homes are put on the market. Are sellers’ asking prices harmful to the public because they don’t necessarily present an accurate representation of a home’s value? Any estimate of value is by definition an opinion.

In the best of all possible worlds, inaccurate data wouldn’t exist or be tolerated. And yes, Zillow would be a better service if its estimates were more reliable. Yet, no one is obligated to use Zillow for any purpose whatsoever, and if the service offers little or no real benefit, so what? Until the coalition comes forward with specific instances of actual harm caused by unknowing reliance on Zillow’s data, the complaint doesn’t appear to have much merit.

The coalition’s members include the California Reinvestment Committee, Coalition for Responsible Lending, Lawyers’ Committee for Civil Rights Under Law, National American Indian Housing Council, National Congress for Community Economic Development, National Council of La Raza and National Low Income Housing Coalition.

Marcie Geffner is a real estate reporter in Los Angeles.

Copyright Marcie Geffner. All rights reserved. No part of this article may be used or reproduced in any manner whatsoever without written permission of the author.

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