The National Community Reinvestment Coalition (NCRC) filed a consumer protection complaint to the Federal Trade Commission alleging Zillow.com is misleading consumers, real estate professionals and financial service providers.
Humm, I don’t know too many consumers, real estate professionals and financial service providers that put much stock in home prices by Zillow.com or other on-line valuation services. Zillow.com states you are looking at home values, not home appraisals. How could Zillow.com come up with an accurate price of your home by just using data from recent sales? To begin with, an appraiser, in order to get a true value of your home, has to look at the exterior and interior of your home in order to find homes similar to yours. Then after finding homes that were recently sold and that are similar to yours, adjustments, plus and minus, have to be made on the homes he finds that are similar to your home to account for neighborhood, landscaping, etc.
You can’t just take recent sales, average them out and say here’s what your house is worth. I believe most people know this. As you know, in Nevada County and many places similar to our county, there are hardly any two homes that are alike. Even if they have the same square footage, acreage, and so on, it still might not be a good comp to use to get a true value of your home or more accurately an appraisal of your home.
A statement on their web site of the NCRC kind of tells it all:
“NCRC quickly discovered that appraisers are the least to blame for inflated appraisals. Lenders, mortgage brokers, real estate agents and title companies have been pressuring appraisers to inflate home values. Appraisers often have risked losing future business when they have not “hit” the price”
Excuse me; appraisers are the least to blame? They are pressured to come up with a phony appraisal? Interesting, when I had my civil engineering practice I was asked a few times if I could change this or that which would skewer the results. I told them if they wanted phony figures that they had come to the wrong person. If all professional appraisers did that, the pressure would stop overnight.
So my interpretation of this complaint is that somehow business is being taken away by Zillow.com from appraisers who give wrong appraisals because they are pressured into giving bad appraisals, which is not their fault, but this complaint might give more business to appraisers who might be good or bad and of course, Zillow.com is giving bad values. So use an appraiser who will hit the value of your house (or hit the target) that you want instead of Zillow.com to get your “true” home value.
I think I got it.