Legislation proposed in Arizona, which contains an amendment that would clearly exempt Zillow.com and other home-value-estimation Web sites from appraisal licensing requirements in the state, has been revived after a failed vote Tuesday.

Senate Bill 1291, which has already passed the Senate, is appraisal-related legislation that requires a two-thirds majority to pass because language in the bill relates to a change in fees. The bill failed in a 32-22 vote this week, but state Rep. Bob Stump, R-Peoria, passed a motion to reconsider the legislation on Monday, April 30.

Arizona state Rep. Michele Reagan, R-Scottsdale, proposed an amendment to the legislation that clarifies what constitutes an appraisal and exempts Web sites like Zillow from securing an appraiser’s license to offer home-value estimates in that state. Reagan’s amendment would exempt from appraisal licensing requirements any “Internet Web site that gives a free opinion as to the value of real estate if this opinion is not referred to as an appraisal.”

Meanwhile, the Arizona Board of Appraisal, a governor-appointed board that has a mission to protect the public while ensuring quality real estate appraisals, has issued two cease-and-desist letters to Zillow charging that the valuations, which Zillow calls Zestimates, can only be provided by licensed appraisers in that state. Zillow officials have not complied with the letters, maintaining that the Web site clearly states that the company offers automated valuations and not formal appraisals.

The appraisal board has considered taking legal action against Zillow and has asked Arizona Attorney General Terry Goddard to consider whether Zillow is in violation of state policy. The appraisal board has not announced any action against other Web sites that provide home-value estimates.

Lloyd Frink, Zillow co-founder and president, said in a statement this week, “We have responded to the letters from the Arizona Board of Appraisal, and will continue to engage with the Board and the Arizona Attorney General’s office to resolve (this).”

He stated that the company is “extremely pleased that the Arizona House of Representatives decided to amend SB1291 to recognize the value that sites like Zillow bring to consumers in providing free and easy online access to real estate data and home valuations. Nothing has changed and we will continue to make Arizona Zestimates available for free to all Zillow users.”

Also, Frink stated that company officials “strongly believe that providing Zestimate home valuations in Arizona is completely legal and in fact an important public service, given that Zestimates are the result of our ‘automated valuation model’ and are not formal appraisals.” He cited national professional guidelines for appraisers, which state that the output of an automated valuation model “is not, by itself, an appraisal.”


Send tips or a Letter to the Editor to glenn@inman.com, or call (510) 658-9252, ext. 137.

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