Zillow Sued over Discrepancies with Zestimate Valuation Tool
By Maggie Wilson @ Real Estate Daily
January 23, 2018

A New Jersey Group is suing Zillow over claims that the company is allowing certain partners to place the Zestimate valuation tool in less-visible places on listing posts. Agents complain that inaccurate Zestimate values sometimes dissuade buyers from purchasing.

Key Takeaways

  • EJ MGT claims Zestimate disseminates misleading and inaccurate pricing information
  • Zestimate is displayed just below the price as default placement
  • EJ MGT alleges in the suit that Zillow allows select partners to rearrange where Zestimate is shown on a page
  • Zillow admits that half of Zestimate values are off by more than 4.5%
Source: Geek Wire


The New Jersey group EJ MGT filed against Zillow one week ago. EJ MGT claims that Zestimate has dissuaded multiple buyers from purchasing their properties. This is not the first time Zillow has been sued over its proprietary home valuation tool either, as a previous real estate lawyer called Zestimate a “tremendous roadblock” to selling a home.

EJ MGT says they set the price for a “palatial mansion situated on a private cliff” at about $7.8 million. Zestimate valued the same property at $3.7 million – less than half of the listed value. The price discrepancy was severe enough to dissuade potential buyers from purchasing, EJ MGT alleges.

“In essence, Zillow is disseminating misleading and inaccurate pricing information that has gained prominence because of Zillow’s market power, and charging downstream participants to hide this negative information that Zillow, itself, acknowledges to be inaccurate,” the suit claims.

Zillow responded by defending Zestimate as a starting point for a home’s price. Spokesperson Emily Heffter told Geek Wire that select partnership programs do include the option to move Zestimate to a different place on the page, but the valuation appears on virtually every listing.

The company also admitted, however, that Zestimate is often inaccurate. According to Zillow’s website, in Seattle, “Zestimate values for half of the homes are within 4.5% of the selling price, and half are off by more than 4.5%.”

It is no secret, even to Zillow, that Zestimate has a long way go. The company even went as far as offering a $1 million prize to any data scientists that could improve their home valuation tool. Zillow is expected to announce the 100 finalists soon.