Frivolous Lawsuits, Real Estate Division: Zestimates vs. Estimates

Word came down yesterday that Zillow, purveyors of remarkably inaccurate home valuations (not even going near the mythological listings lest I have to hear again that it’s not their fault) has filed a patent infringement lawsuit against Trulia, recent purveyors of equally inaccurate home valuations.

It seems Zillow is less than thrilled that another company has attempted to gain a toehold in the consumer-unfriendly world of fantastically wrong valuation data. It also seems that I should have applied for a patent on the random number generation program I wrote on my Texas Instruments home computer back in 1986 … if only I had thought to give those numbers a fancy name like Zestimate, or “Automatically Determining A Current Value For A Real Estate Property, Such As A Home, That Is Tailored To Input From A HumanUser, Such As Its Owner.”

I love that name, especially when you consider how rarely Zillow comes up with a current value for a real estate property. Or at least a somewhat accurate current value.

Here’s the latest version of Zillow’s self-published chart, the link to which is buried at the bottom of the site’s first page:

So in Phoenix, where sales data is readily available to the general public (much less a company full of venture capital and then IPO cash) and where large swaths of the Valley can be evaluated in the same areas on a per-square-footage basis, the Zestimates are accurate to within 10 percent barely half the time.

What you won’t see anywhere in the comments is any explanation for the poor quality of the valuations data here in Phoenix; no, instead we’ll likely be told by people who don’t speak with consumers anymore that consumers view the Zestimates only as a starting place. To say otherwise would be to acknowledge how many buyers and sellers have been disadvantaged by their own gullibility in believing the Zestimate – a number so cherished that Zillow patented its flawed methodology and now is suing Trulia for doing the same thing – is a somewhat accurate valuation.

Shame there’s no class action suit lurking there, perhaps from a large group of sellers whose home sale potential was damaged by artificially low Zestimates … that might be worth following, if only to see Zillow try and explain that the Zestimate is a toy of scarcely more merit than a Magic 8 ball while simultaneously defending its patented right to be the sole provider of Magic 8-ballesque home values.

Frankly, I couldn’t care less what the outcome of this case may be. When one snake-oil salesman takes on another on the validity of their magic cure-alls, the best possible hope for the public is that both sides are exposed as the frauds they know themselves to be.

Sadly, that’s not going to happen. So it’s left to those of us who deal with consumers and home values for a living to explain that the estimates on Zillow and Trulia are to home values what Sex Panther is to cologne. 60 percent of the time, it works every time.

Jonathan Dalton

Jonathan Dalton is a 40-plus-year resident of the Valley and has been helping folks buy and sell homes since 2004. He can be reached at 602-502-9693 or info at