Getting Zesty: Zillow’s Upgraded Zestimate

Written by Posted On Tuesday, 20 August 2019 04:38

What Is Zestimate?

Created by Zillow, an online real estate database company, Zestimate is the company’s home valuation model, which estimates a home’s market value based on public and user-submitted information. It considers several factors, including home features, location, and market conditions. Currently it’s the most commonly-used home valuation estimator online and, yet, has been at the center of controversy over the past couple years.

Zillow Zestimate

Predictions and Predicaments

Although Zillow points out that its Zestimate is not an appraisal, or an unbiased estimate of a home’s true market value determined by a qualified expert, Zillow’s proprietary tool has taken some heat for its shortcomings. From home sellers expecting to get more, home buyers expecting to pay less, and real estate professionals wishing they weren’t caught in the middle, the Zestimate has been a source of dispute for quite some time.

In fact, back in 2017, a group of homeowners in Illinois sued Zillow, alleging Zestimate’s inaccuracies made selling significantly more difficult. Ultimately, the United States Seventh Circuit of Appeals found that because the process is most accurate when “errors are not biased to favor sellers or buyers” Zillow has no obligation to change its home estimate values when they are not as high as homeowners expect.

Zillow Estimate

All About Accuracy

In an effort to rebrand its image with consumers and create a more accurate tool, Zillow has just upgraded Zestimate by improving how its viability is reported. In the past, Zillow simply showed the median errors for all Zestimate values combined in an area. Three years ago, the national median error hovered at 6.7%. Back in 2018, the figure stood at 4.6%.

Nowadays, however, Zillow differentiates its median error based on whether the home is listed for sale or not. This year, the median error is only 1.9% for homes that are listed for sale and 7.7% for homes that are not listed for sale. Thus, by being more transparent about the accuracy of the Zestimate, Zillow hopes to increase consumer confidence in its tool and assuage the concerns of the company’s critics.

Picture Perfect?

Perhaps most intriguing, Zillow has a new algorithm that uses photos to help decide the appeal and worth of any home. As explained by Stan Humphries, Zillow’s chief analytics officer & economist, “We’ve taught the Zestimate to discern quality by [using] … millions of photos of homes on Zillow.” By programming the Zestimate to recognize certain visual cues as indicators of higher quality, Humphries states that, “if a kitchen has granite countertops, the Zestimate now knows that the home is likely going to sell for a little more.”

In other words, by using pictures provided by homeowners and real estate agents when a property is listed, and incorporating publicly available photos taken by a city or town assessor’s office, Zillow is transforming its Zestimate to eventually become the equivalent of a “live offer.” Of course, computer-generated photos used to stage homes have also been controversial since they are not necessarily accurately portraying the actual depiction of real estate. Zestimate’s new algorithm may be an upgrade, but it may still have credibility issues.

From The Trenches,

Roy Oppenheim

Oppenheim Law | Real Estate Attorneys
2500 Weston Rd, Suite 404
Fort Lauderdale, FL 33331
954-384-6114
https://www.oppenheimlaw.com/ 
Originally posted on South Florida Law Blog: Getting Zesty: Zillow's Upgraded Zestimate https://southfloridalawblog.com/getting-zesty-zillows-upgraded-zestimate/
 
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Roy Oppenheim

Roy Oppenheim has been practicing law since 1987 focusing his practice on all phases of real estate and real estate development and redevelopment from land acquisition to multifamily, retail, office hotel, industrial and mixed use development, as well as single family home development for sale and rent. Mr. Oppenheim has routinely represented developers, investors, home buyers and lenders in these commercial transactions in Florida and elsewhere in the United States. He has been involved in virtually every stage of the development process from acquisition, due diligence, title insurance, financing and closing of such projects. Mr. Oppenheim’s client turn to him for his sharp legal acumen along with his entrepreneurial background that allows Mr. Oppenheim to approach each matter from a pragmatic and refreshing background. Further, clients enjoy Mr. Oppenheim’s infectious passion for his involvement in their business as well as his unbiased legal opinion based on a holistic approach; rather than from a siloed perspective. From analyzing, negotiating to structuring deals, Mr. Oppenheim’s clients turn to him time and again for his advice. Mr. Oppenheim also represents Florida real estate brokers and Realtors, individual buyers, and sellers in connection with the purchase and sale of Florida real property as well as litigates real estate disputes involving both residential and commercial properties. Mr. Oppenheim also served as outside general counsel for various Florida companies over the past 30 years providing sound legal advice to start ups as well as mature businesses concerning various business and corporate matters including governance, expansion, acquisitions, borrowing, commercial litigation, and employment related matters. The myriad of businesses Mr. Oppenheim represents is vast including from the fields of retail, hospitality, entertainment, healthcare, technology, import-export, and wholesale. Many of these businesses have both a physical and/ or online presence. Mr. Oppenheim here again brings his over three decades of legal knowledge and business experience to his clients and their respective businesses. After Working for Milbank Tweed on Wall Street and White & Case in Miami, Mr. Oppenheim founded Oppenheim Law in 1989 with his wife Ellen Pilelsky where they began representing Arvida development and its various home builders amongst numerous national banks such as Northern Trust, Chase Bank and SunTrust Bank for over 15 years. Serving national, international, and local clients, Mr. Oppenheim has the highest rating (A-V) conferred by Martindale Hubbell Law Directory, the most respected directory of lawyers and law firms in the U.S. He has also been selected as a “Best Real Estate Lawyer in the United States” since 2012, a designation of only 5% of all Lawyers. The Firm also has a 10.0 rating, the highest rating from AVVO another distinguished national rating service. In 1989, Mr. Oppenheim also co-founded and served as general counsel to ShopSmart Corp., the company that originated and owned the GNC Gold Card Program, a program that continues to this day and was one of the first cross-promotional programs of its kind. In addition, in 1994, Roy co-founded Weston Title & Escrow, the oldest title company in Weston, Florida that serves all of Florida and has closed in excess of three billion dollars in transactions. Mr. Oppenheim currently serves as its Senior Vice President. In 1999, Mr. Oppenheim also served a one-year term on the board of directors for Catalina Lighting, a publicly traded company on the New York Stock Exchange. Mr. Oppenheim is also designated by the Florida Secretary of State as an International Civil Law Notary, one of only 137 out of 106,000 attorneys in the State. In 2008, during the foreclosure crisis and the Great Recession, Mr. Oppenheim and his team of lawyers represented 1000’s of homeowners that were unable to pay their mortgages and were facing foreclosures. Facing daunting odds and the rath of large foreclosure mills funded by the big banks Mr. Oppenheim helped establish a new legal practice area of foreclosure defense while helping these homeowners defend themselves against the banks. During that time Mr. Oppenheim became an outspoken critic of the banks and started the Southfloridalawbog.com which was voted the best business and technology blog by the South Florida Sun-Sentinel. The blog was syndicated to Yahoo! Homes, and Newsweek. Mr. Oppenheim routinely appeared on HuffPost Live, FOX News, and Lifetime TV and on WLRN Radio. In addition, he has been quoted in prominent national publications, including USA Today, The New York Times and Huffington Post, among others. Mr. Oppenheim has also co-authored and two law review articles, Deconstructing The Black Magic of Securitized Trusts, published in the Stetson University Law Review’s Spring 2012 Edition, and The Emperor’s New Clothes, published in the William & Mary Business Law Review Volume 6. Both addresses systemic legal problems with the residential foreclosure process at the time. During that time Mr. Oppenheim became an outspoken critic of the banks and started the Southfloridalawbog.com which was voted the best business and technology blog by the South Florida Sun-Sentinel. The blog was syndicated to Yahoo! Homes, and Newsweek. Mr. Oppenheim routinely appeared on HuffPost Live, FOX News, and Lifetime TV and on WLRN Radio. In addition, he has been quoted in prominent national publications, including USA Today, The New York Times and Huffington Post, among others. Mr. Oppenheim has also co-authored and two law review articles, Deconstructing The Black Magic of Securitized Trusts, published in the Stetson University Law Review’s Spring 2012 Edition, and The Emperor’s New Clothes, published in the William & Mary Business Law Review Volume 6. Both addresses systemic legal problems with the residential foreclosure process at the time. Admissions Florida Bar, 1987; Member of the Real Property Probate and Trust Law Section New York Bar, 1987; United States District for the Southern and Eastern Districts of New York, 1987 U.S. District Court, Southern and Middle Districts of Florida, 1993 Education Princeton University, A.B., cum laude, 1982 Northwestern University School of Law, J.D., 1986 Member of the Northwestern University Law Review Member of the National Moot Court Team

https://www.oppenheimlaw.com

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