Zillow faces lawsuit over ‘Zestimate’ tool that calculates a house’s worth

 

Zillow faces lawsuit over ‘Zestimate’ tool that calculates a house’s worth

It was bound to happen: A homeowner has filed suit against online realty giant Zillow, claiming the company’s controversial “Zestimate” tool repeatedly undervalued her house, creating a “tremendous road block” to its sale.

The suit, which may be the first of its kind, was filed in Cook County Circuit Court by a Glenview, Ill., real estate lawyer, Barbara Andersen. The suit alleges that despite Zillow’s denial that Zestimates constitute “appraisals,” the fact that they offer market-value estimates and “are promoted as a tool for potential buyers to use in assessing [the] market value of a given property,” shows that they meet the definition of an appraisal under state law. Not only should Zillow be licensed to perform appraisals before offering such estimates, the suit argues, but it also should obtain “the consent of the homeowner” before posting them online for everyone to see.

In an interview, Andersen told me she is considering bringing the issue to the Illinois attorney general because it affects all property owners in the state. She has also been approached about turning the matter into a class action, which could touch millions of owners across the country.

In the suit, Andersen said that she has been trying to sell her townhouse, which overlooks a golf course and is in a prime location, for $626,000 — roughly what she paid for it in 2009. Houses directly across the street but with greater square footage sell for $100,000 more, according to her court filing. But Zillow’s automated valuation system has apparently used sales of newly constructed houses from a different and less costly part of town as comparables in valuing her townhouse, she says. The most recent Zestimate is for $562,000. Andersen is seeking an injunction against Zillow and wants the company to either remove her Zestimate or amend it. For the time being, she is not seeking monetary damages, she told me.

Emily Heffter, a spokeswoman for Zillow, dismissed Andersen’s litigation as “without merit.” A publicly traded real estate marketing company based in Seattle, Zillow has been offering Zestimates since 2006. At present, it provides them for upwards of 110 million houses, whether for sale or not. Type in almost any house’s street address, and you’ll probably get a property description and a Zestimate. The value estimates are based on public records and other data using “a proprietary formula,” according to Zillow.

The Zestimate feature is the cornerstone of Zillow’s business model because it pulls in millions of house shoppers, allowing the company to sell advertising space to realty agents. Zillow makes big money with the help of its Zestimates: In the first quarter of this year, it reported $245.8 million in revenue — a 32 percent jump over the year before — including $175 million in payments from “premier” agents, who pay for advertising.

But there’s a flip side to Zestimates. Homeowners, realty agents and appraisers have been critical for years about the valuation tool, citing estimates that too often are far off the mark — sometimes 20 percent or 30 percent too low or too high — and misleading to consumers. Zillow itself acknowledges errors. Nationwide, according to Heffter, it has a median error rate of 5 percent. Zestimates are within 5 percent of the sale price 53.9 percent of the time, within 10 percent 75.6 percent of the time and within 20 percent 89.7 percent of the time, Zillow claims.

A Zestimate “is not an appraisal,” the company says on its website, but instead is “Zillow’s estimated market value” using its proprietary formula. Another way of looking at the Zestimate error rate: Roughly one quarter of the time, the value estimate is off by 10 percent or more of the selling price, and wrong by 20 percent or more 10 percent of the time. The 5 percent median error rate may sound modest, but when computed against median sales prices, the errors can translate into tens of thousands of dollars — hundreds of thousands in high-cost areas. Also, in some counties, error rates zoom beyond the 5 percent median: 33.9 percent, for example, in Ogle County, Ill., and 10 percent to 20 percent in a handful of counties in Ohio, Maryland, Florida, Oklahoma and Illinois.

Some appraisers are cheering Andersen’s suit and welcomed the idea of state-by-state legal challenges. “They’ve been playing appraiser without being licensed for years, and doing a bad job,” said Pat Turner, a Richmond appraiser. “It’s about time they got called on it.”

Selling? How to Make Your House Look Great in Photos

 

How an agent can help alleviate stress

How an agent can help alleviate stress

Purchasing a home can be a stressful experience, whether you’re a first-time buyer or you’ve been through the process before. But that’s one of the reasons that working with a real estate professional is so worthwhile. With your agent’s guidance, buying a home should be enjoyable, rather than stressful. Here are some of the more unique circumstances where your agent can make your life much easier.

Out-of-town buyers: If you’re looking for vacation homes or moving to a job in a new city, there’s a good chance that viewing homes will be difficult-you could be a long drive or even a plane ride away. With today’s video messaging apps like Skype or Facetime, your agent can walk you through a property virtually. It’s not the same as walking through in person, but it will at least give you an idea about whether a property is worth pursuing further.

When life is just too crazy: If you’re just getting too busy with everything else going on in your life, a good buyer’s agent should be able to recognize the situation and help you take a step back. They can suggest that you take a few weeks off from your home search to recharge, or only focus on properties that exactly fit your wants list.

Inspection issues: You’re dreaming about move-in day, and then some unforeseen issues turn up during inspection. A good agent can work out those issues by negotiating a lower offer-to cover costs of repairs-or by getting the seller to fix the problem.

Sellers’ Biggest Hurdle? Finding Another Home

 

Sellers’ Biggest Hurdle? Finding Another Home

The greatest challenge for home sellers this year appears to be finding another home to buy. That’s according to a new survey by Redfin, which found that for almost 66 percent of sellers, the biggest concern they have is finding a new property.

“It’s a seller’s market, but the catch is, most sellers need to buy as well,” said Eileen Lorway, a Redfin real estate agent in the Boston area. “This is a conversation I have with many clients at our first meeting.”

A frequent part of the conversation, Lorway said, were stipulations designed to keep sellers from ending up homeless, or at least unreasonably displaced, once they close the sale.

“We discuss options like ‘seller to find suitable housing’ contingencies for the sale contract, ‘purchase contingent on sale of current home’ options for the buy offer, rental options, stay-with-family options and bridge loans,” she said. “Sellers who are buying need to think outside the box a little bit. It’s not easy, but we often do end up closing on sale and purchase on the same day.”

Redfin’s poll of 800 agents found that more than half reported homes selling faster this year than last. Half also reported that competition for homes that do go on the market now is more fierce. About 57 percent of agents poled said they have been involved in at least one instance of a home receiving 10 or more offers this year; a mere 2 percent said they have yet to be involved in a bidding war at all.

Not insignificantly, nearly a third of agents said that sellers are becoming more demanding. And almost half said though it’s very much a seller’s market, more sellers are making unrealistic demands and asking unrealistic prices for their properties.

Lorway said she encourages sellers who are also buyers to think about selling first.

“They should consider temporary rental options, or moving in with relatives after they sell,” she said.

Half of agents reported that the typical down payment for successful buyers in their market was less than 20 percent. This, Redfin reported, means there are other ways to make an offer competitive‒‒working with a reputable local lender who can guarantee to the seller’s agent that the loan will be approved quickly, for instance, or building a rapport with the seller.

“I recently had an FHA-backed offer with 3.5 percent down beat out four other offers, each of which had conventional 20-percent down loans,” said Tim Zielonka, a Redfin agent in Chicago. “The sellers were at the showing. I introduced them to the buyers and pointed out that both were huge enthusiasts of both vintage bicycles and classic cars, which put them at ease with one another and enabled them to form a natural connection. Had they not discovered this shared interest, my clients may not have gotten the property.”

The Ultimate Guide to Funky Home Smells

~ Especially when you are selling your house these are great things to look for and assess so you can list your home in it’s best light! ~

The Ultimate Guide to Funky Home Smells

| Mar 30, 2017

There are two definitions of funky: 1) something that’s cool, and 2) something that smells bad. For our purposes, we’ll be talking about the latter—and the tragic consequences if this stench is emanating from your home.

The problem is, you may be so accustomed to your home’s smell that you don’t even notice when your guests are knocked off their feet when they enter your home. And whether you’re just entertaining or are hoping to sell your home, off-putting smells can be a huge turnoff, even if your home is immaculate otherwise. To help, here’s your ultimate guide to all the odors that can assail your home and how to get rid of them once and for all.

Rotten food

Cause: Your refrigerator and garbage disposal are basically burping up decaying food.

What to do: Purge your refrigerator on a regular basis, and clean the shelves and drawers to remove rotten spilled liquid. Yes, this is gross. Do it.

“Use distilled white vinegar or hydrogen peroxide and a microfiber cloth,” says cleaning expert Leslie Reichert. To rid your sink of stink, clear rotting food from the blades of your garbage disposal by putting ice cubes down it with some salt and frozen lemon peels.

———

Animal odors

Cause: The most common nose-crinkling smells in a home are caused by the furry friends that live with us, usually because they don’t always relieve themselves where they should. Odors can also be due to a lingering stench on animal fur, says Frank Lesh, executive director of the American Society of Home Inspectors.

What to do: If a cat or dog uses a carpet as a toilet, use a pet enzyme removal product such as Resolve on the offending area to remove all trace of the scent and find an effective way to deter your pet from a repeat performance in a spot it may consider its own.

For litter boxes, sprinkling a bit of baking soda can work wonders. If shedding is your nemesis, vacuuming the fur (off the floor and furniture) and spot-deodorizing should do the trick.

If all of the above do not work, removal of the offending furniture or rug is often the only way to resolve the issue, says Lesh.

———

Smelly carpets

Cause: Think of carpets as large sponges that absorb all the smells in your home—from pet odors to sweaty feet to pungent cooking, and beyond.

What to do: For large olfactory challenges, call in a steam cleaner. For smaller yet troublesome areas, put some cheap vodka in a spray bottle and lightly mist the carpeting.

“When the vodka evaporates, it will take the smells with it,” Reichert says.

———

Stinky AC

Cause: Your air conditioner dehumidifies the air as it cools, but stagnant water can collect in an AC unit, allowing mold and mildew to grow in the lingering moisture. This can result in a smell similar to sweaty extremities wafting from air vents, says Richard Ciresi, a multiple-unit franchisee of Aire Serv in Louisville, KY. And, in addition, if someone in your home smokes, the fumes can get pulled into the condenser coil and recycled into your home every time you run the AC, says Ciresi.

What to do: A quick cleaning and repair to help excess water drain properly should remedy a mildew issue. Since a dirty filter can also harbor mold growth, replace filters regularly. To banish  lingering smoke smells, clean the coil.

———

Mustiness

Cause: Water’s the culprit! “Basement smell” can severely affect the structural integrity of your home as well as your health. Although water can accumulate anywhere, areas where dampness tends to hide include the attic, basement, and bathrooms.

“If you have a water leak behind a wall or under a floor, wood rot may occur along with mold and mildew odors,” says Lesh.

What to do: Finding small leaks early can help prevent serious water damage and offending stenches.

“I recommend looking at the underside of the attic roof at least twice a year or after heavy rain/snowfall in the spring,” says Lesh. In a basement or crawl space, water accumulation is often caused by poor drainage from the roof. Keep your gutters clean and the downspouts flowing away from the foundation. And always dry out damp areas with a humidifier.

———

Burnt … something

Cause: You may smell a truly weird odor the first time you fire up your furnace in the fall. But relax, it’s typically from the accumulated dirt that falls into the floor ducts, says Lesh. This scent may permeate the entire house for a while when the debris first heats up.

What to do: Simple—clean the ducts before you turn your heat on each year.

———

A general stale scent

Cause: Stagnant air holds on to dust, dander, and dust mites.

“This usually happens in the summer and winter as we all keep our homes closed up because of air conditioning and heating,” says Reichert.

What to do: You can battle stale air just by opening a few windows once a week to increase air flow.

“Your home needs to have the air exchanged; and if you open some windows, you allow fresh air into the house and remove those stale odors,” says Reichert.

32 Unexpected Places You Should Be Cleaning In Your Home

32 Unexpected Places You Should Be Cleaning In Your Home

1. Lampshades

Lampshades

They can collect dust like nobody’s business and dim your lamp’s light output. Make a few passes with a lint roller about once a week to de-fuzz them and brighten the room.

Get a five-pack of disposable lint rollers from Amazon for $15.53.

2. Kitchen utensil drawer organizers

Kitchen utensil drawer organizers

Take special care with ~adjustable~ organizers like this one because they’re prone to dirt falling into their nooks and crannies. Once a week, wipe them out with any all-purpose cleaner you use on the rest of your kitchen surfaces.

Get it from Amazon for $14.99.

3. Knife blocks

Knife blocks

Those slots that protect your prize knives are also a prime spot for dust. Once a month, remove the knives and use the crevice tool on your vacuum cleaner to suck out dust. Don’t have one? Blast it with your hairdryer on High or use a long pipe cleaner. Sanitize it by rinsing the block in hot soapy water, then soaking in a solution (1 tbsp. of bleach to 1 gallon of water) for 1 minute. Dry on a towel with slots-side down.

Get it from Amazon for $21.36.

4. The tops of ceiling fan blades

The tops of ceiling fan blades

Halt an allergy storm before you need a seasonal indoor breeze. Use an old pillowcase to sweep off — and contain — the dust. Read the full tutorial on WikiHow.

5. Dishwasher

Dishwasher

It’s always important to clean the things that clean your things. Get the instructions on One Good Thing by Jillee.

6. Cookie sheets

Cookie sheets

Emily Shwake / Buzzfeed / Nifty

No, but like, really clean them. Check out our two-step trick here.

7. Wood cutting boards

Wood cutting boards

Goodful / BuzzFeed

Obliterate the aftermath of raw chicken breasts with vinegar and hydrogren peroxide. Check out more Clever Vinegar Tricks That’ll Make Cleaning So Easy.

Get the supplies from Amazon: 1 gallon of distilled vinegar for $11.95 and three 24 oz. spray bottles for $11.99.

8. Clothes iron

Clothes iron

Annihilate rust from your hard-working iron with vinegar and baking soda. Get the full how-to on Thrifty & Chic.

Get 13.5 lbs. of baking soda from Amazon for $17.73. (It can be used to clean lots of other stuff on this list, too.)

9. Hairbrushes

Hairbrushes

Loosen hair strands and mix up a batch of hot water and baking soda for a good soak. Get the deets on Passion for Savings.

10. Flat irons

Flat irons

Styling products and hair oils can build up into a gross residue. This works for curling irons, too! Read the full how-to on One Good Thing by Jillee.

11. Jewelry

Jewelry

Spiff up everything from your eyeglasses to your engagement ring (separately) with this little machine that uses sonic-wave technology to loosen grime and shine surfaces.

Get it from Amazon for $34.99.

12. Sunglasses

Sunglasses

Sweat, makeup, and sunscreen can have them looking worse for wear. Always follow the manufacturer’s instructions. But everyone should invest in a microfiber cleaning cloth ($8.99 for a pack of six).

Get the sunglasses from Amazon for $12.99. / Available in 15 color combos.

13. The grooves of sliding-glass door tracks

The grooves of sliding-glass door tracks

Brush away debris that can clog up your track with this handy little brush.

Get it from Amazon for $6.99.

14. Pet bowls

Pet bowls

Wash bowls daily as you would human bowls. It’ll even help with the pet smell!

Get it from Amazon for $3.93+. / Available in four sizes, four colors.

15. Clothing drawer organizers

Clothing drawer organizers

Give them an occasional wipe down because even though your clothes in storage are clean, dirt can get in from rummaging around to find the right bra.

Get them from Amazon for $10.99.

16. In between blinds

In between blinds

Make the task simpler on the reg with this specially made tool. Get it from Amazon for $8.99.

If you’re dealing with a horror show of dust — and they’re not wood — remove the blinds from the window and dunk them in a bath of hot, soapy water.

17. Makeup organizers

Makeup organizers

It isn’t enough to clean your makeup containers and tools. Wipe down organizer surfaces with hot, soapy water or a cleaning wipe.

Get them from Amazon: Makeup organizer for $11.99 and 225 Clorox wipes for $11.97.

18. Around plumbing fixtures

Around plumbing fixtures

Sometimes you need some tiny tools to get into allllll the crevices.

Get it from Amazon for $5.99. (It’ll work on shower-door tracks, too.)

19. Dryer lint trap

Dryer lint trap

Built-up lint can infringe upon — and lengthen — your machine’s drying process. Plus, it’s a fire hazard!

Get them from Amazon: Vacuum attachment for $20.99 or a standalone brush for $10.38.

20. Basically everywhere in your car

Basically everywhere in your car

Keep this little hand-vac in your car, plug it into the cigarette lighter, and use the slim nozzle to get into every feasible spot. Get it from Amazon for $20.99.

And learn other ways to de-slime your ride with our 23 Genius Solutions To Issues Every Car Owner Faces.

21. Phone and computer screens

Phone and computer screens

Dust, oil from your skin, and every little piece of lint to ever float through the atmosphere ends up on your electronics’ screens. Make a pass with this little roller every day you use them to see a difference.

Get it from Amazon for $14.99.

22. Toothbrush holder

Toothbrush holder

All those bathroom germs have to go somewhere. Wipe it down at least weekly during your normal bathroom-cleaning seshes.

Get it from Amazon for $8.99.

23. Trash cans and recycling bins

Trash cans and recycling bins

Nope. That smell wasn’t your actual bag of trash. Empty, rinse out with a garden hose (or in your bathtub), and then douse in disinfectant.

Get this easy-to-remove-and-clean set from Amazon for $79.99.

24. Plastic shower curtain liners

Plastic shower curtain liners

Fight off in-shower mildew by tossing your liner in with some towels in the wash. Read the deets on Life at the Drafty Doublewide.

Get it from Amazon for $21.33.

25. Bath mat

Bath mat

Throw it in the wash once a week so you won’t instantly dirty your clean feet post-bath time.

Get it from Urban Outfitters for $29.

26. Bedskirts

Bedskirts

Aka dust ruffles. Wash them weekly with the rest of your linens. Or this cat will judge you.

Get it from Amazon for $12.95+. / Available in four sizes, five colors.

27. Toaster (the inside and outside)

Toaster (the inside and outside)

 

Actually crisp toast — not crumbs and debris from toast of yore — by emptying the crumb tray once a week. (Even the cheapest of toasters, like this one, have it.) And give the exterior a good wipe down with a stainless-steel cleaner, too.

Get it from Amazon for $19.96.

28. Pet beds

Pet beds

All the snuggles and treat-gnawing can leave them smelling worse than your actual pet. Remove further traces of your beloved family member with our 23 Tips And Products That’ll Save You From Being Covered In Pet Hair.

Get this machine-washable bed from Amazon for $25.99+. Available in seven colors.

29. Makeup bags

Makeup bags

Take some brush cleaner or just good ole hot soapy water to the interior to pick up all matter of powders and liquids.

Get it from Forever21 for $6.90.

30. Throw pillows

Throw pillows

They get nearly as much contact as your bed pillows. Remember to clean your pillowcases and inserts as directed on the label so you won’t luxuriate among filth.

Get this pillow case from Amazon for $7.99. / Available in three sizes, eight colors.

31. The bottom of your shoes

The bottom of your shoes

A few passes on the welcome mat is NOT ENOUGH to really get in the treads of your footwear. A boot scraper stationed at the door of your mudroom will do wonders for your floors.

Get it from Amazon for $16.97.

32. And lightbulbs

And lightbulbs

Dust ‘em for an instantly brighter look!

Americans buy existing homes at fastest pace in a decade

 

Associated Press

Americans shrugged off rising mortgage rates and bought existing homes in January at the fastest pace since 2007. That has set off bidding wars that have pushed up prices as the supply of available homes has dwindled to record lows.

Home sales rose 3.3% in January from December to a seasonally adjusted annual rate of 5.69 million, the National Assn. of Realtors said Wednesday.

Steady job gains, modest pay raises and rising consumer confidence are spurring healthy home buying even though borrowing costs have risen since last fall. Some potential buyers may be accelerating their home purchases to get ahead of any further increases in mortgage rates. With few homes available for sale, buyers feel pressure to rapidly close a deal when they find a suitable property.

The typical house for sale was on the market for just 50 days last month, down from 64 days a year earlier. Strong demand is pushing up the median home price, which jumped 7.1% from a year earlier to $228,900.

The supply crunch probably will get worse during the upcoming spring buying season, economists say, because demand typically rises by more than supply during that time.

“Relative to the number of households, the number of homes for sale is well through prior historic lows,” said Ted Wieseman, an economist at Morgan Stanley. “The level of inventories could be a much bigger challenge moving into much higher sales in the spring and summer.”

That, combined with higher mortgage rates, soon could restrain sales.

“We are a bit less gloomy about housing than a couple of months ago, but sales will not continue to rise at their recent pace,” said Ian Shepherdson, chief economist at Pantheon Macroeconomics.

The bulk of the stronger buying is occurring among higher-priced properties, the Realtors group said. Sales among homes and condominiums priced at $100,000 and below fell nearly 10% in January compared with a year earlier. They rose slightly in the $100,000 to $250,000 bracket and jumped roughly 20% in homes priced at higher levels.

Last year, low mortgage rates helped offset rising home prices. Now, both are rising.

Mortgage rates have climbed since November’s presidential election. Investors are anticipating that tax cuts, deregulation and infrastructure spending will accelerate growth and push up inflation. That has caused investors to cut back on their bond holdings, pushing up yields.

The average rate for a 30-year fixed mortgage was 4.15% last week, according to mortgage buyer Freddie Mac. Although that has slipped since earlier this month, it is much higher than last year’s average rate of 3.65%.

By some measures, the housing market has fully recovered from the bust that began in 2006. Yet its newfound health is creating another set of challenges.

In high-demand areas, mostly on the West Coast, homes are being bought after less than a month on the market, according to real estate brokerage Redfin.

Denver was the fastest market last month, Redfin found, with purchase contracts signed just 23 days after listing for a typical home — far faster than the 43 days that was typical a year earlier. Seattle was the second-fastest, with 26 days on the market, followed by Oakland, at 27 days.

The strength in sales should lift growth, as new homeowners buy furniture and appliances and spend more on landscaping and outdoor equipment. Home sales also tend to spur renovations, which helps to update aging properties and generates additional construction work for the broader economy.

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