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Attempt to clarify Zillow home values fails in Arizona
Proposed legislation would have exempted Zillow from appraisal license requirements

Tuesday, April 24, 2007

By Glenn Roberts Jr.
Inman News

Proposed legislation in Arizona that would have formally legalized Zestimates — the home-value estimates generated at Zillow.com — failed in the state House of Representatives today.

Senate Bill 1291 had already passed the state Senate, and a House amendment sought to exclude Zillow and other automated home-valuation sites from the need to have an appraisal license to offer value estimates in the state.

Arizona state Rep. Michele Reagan, R-Scottsdale, proposed the amendment to the legislation that would have clarified what constitutes an appraisal and exempt Web sites like Zillow from securing an appraiser’s license to offer home-value estimates in that state.

A spokesman for state House Republicans said that the amendment may be added to another appraisal-related bill.

State law already provides specific exemptions from licensing for the value estimates of real estate brokers, salespeople and others, so long as those individuals do not refer to the value estimates as appraisals.

“Companies like Zillow.com provide an easy way to get an idea of the value of a home anywhere in the country,” Reagan said in a statement.

Sarah Mann, a Zillow spokeswoman, said, “We are very pleased that the Arizona House of Representatives has amended Senate Bill 1291 … to exclude Web sites like Zillow.”

The Arizona Board of Appraisal, a governor-appointed board that aims to protect the public while ensuring quality real estate appraisals, has clashed with Zillow over the valuations that the company offers to consumers. The board issued two cease-and-desist letters to Zillow, charging that its valuations require a license in the state. But Zillow has not complied with the letters, responding that its Web site clearly states that the company offers automated valuations and not formal appraisals.

The appraisal board, which has considered taking legal action Zillow, also asked the Arizona Attorney General Terry Goddard to consider taking action against Zillow.com. A spokeswoman for the Attorney General’s Office said that the office cannot comment about pending investigations.

Deborah G. Pearson, the executive director for the appraisal board, was not immediately available for comment today about the proposed legislation.

Reagan questioned the appraisal board’s complaints against Zillow. “Zillow.com provides a valuable resource for Arizonans and an unelected board’s desire to hamper consumers’ efforts to get as much information as possible makes no sense,” she stated.

The Arizona Board of Appraisal sent two cease-and-desist letters ordering Zillow.com to stop offering its free service in the state. The board is also considering suing the Seattle-based company despite its wide popularity in Arizona and around the nation. In addition, the board asked the Arizona attorney general to prosecute Zillow.com for offering the estimates.

While there is a growing list of Web sites that offer home-valuation estimates, the board did not take any action against other sites.

Zillow.com officials have said that no other state has asked the company to obtain an appraisal license, though some appraisals and real estate professionals have complained about the accuracy of Zillow’s value estimates.

In October, the National Community Reinvestment Coalition, a coalition of groups that promote the flow of private capital to traditionally underserved communities, filed a formal complaint with the U.S. Federal Trade Commission charging that the company is misleading consumers and industry professionals about the accuracy of its automated tools.

Zillow has countered that it provides detailed information at its Web site about the varying accuracy of the estimates.

James -

My apologies, it’s a software bug. We will deploy a fix next week that will allow you to stop being an agent on Zillow. In the meantime, please e-mail me [davidg at zillow] and I’ll get your posting updated.

If it’s any consolation, Zillow also thinks I’m an agent –
http://www.zillow.com/profile/DavidG

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