There’s been a lot of chatter in the past few days about a letter sent to the Federal Trade Commission about Zillow. The letter says that Zillow is misleading consumers about the accuracy of its data.
Here’s our take:
We try really hard to be approachable and open about what we’re doing, and take all feedback seriously. So we were surprised (and disappointed) that the group that sent the letter, the National Community Reinvestment Coalition, did not contact us first, and instead sent it directly to the press at the same time it was sent to the FTC.
Zillow is about empowering consumers with information and tools which they have not had access to before. Our Zestimates are designed as a starting point. We say in many places on the site (and next to the Zestimate on every home details page) that Zillow is not an appraisal, but a free research tool for consumers. We’ve also tried to be really transparent since we launched about Zestimate accuracy. We state that nationwide, our median margin of error is 7.2 percent, and 62 percent of Zestimates fall within 10% of the actual sale price of a home. (see accuracy statistics for every county Zillow covers here, or linked off the home page).
We pull these stats by looking at millions of transactions and Zestimates — that’s millions of comparisons — not by picking a handful of examples and drawing broad conclusions that make us look good.
We feel these accuracy numbers are pretty good, but we are working hard to make them better. Since our beta launch in February we’ve had a tool called “My Estimator” that lets anyone work up their own estimate of any home’s value by inputting information that only someone who’d been inside the house would know. Recently, we opened up our database to let owners input their own home facts and publish their own estimates alongside ours. This is some progress; there will be more.
We have opened up a dialog with the NCRC, and we’ll keep you posted. We hope this helps address any confusion, and as always, we look forward to your feedback and suggestions for how we can make the site and our service better.