Zillow, an online real estate database company, allows anyone anywhere to look up estimates on homes, including sale prices and mortgage payments.
The site lists Zestimates for each property, or Zillow's estimated market value for an individual home. The company says a Zestimate, which is "automatically computed based on millions of public and user-submitted data points," is a "starting point in determining a home's value and is not an official appraisal."
Zillow's CEO Spencer Rascoff recently purchased a 12,732-square-foot, six-bedroom, nine-bathroom house in Los Angeles for a little less than $20 million, while the site had estimated the home's price at $18.4 million, Curbed reported.
A headline on the Curbed story implied that Rascoff had "overpaid" for the house.
According to other media reports, a home that Rascoff recently put on the market in Seattle, where Zillow is headquarted, sold for $1.1 million -- about $650,000 under the Zestimate, The Real Deal reported, and a difference of about 40 percent.
A spokesperson for Zillow provided a statement in an email:
"The accuracy of Zillow's home estimates is well publicized," said Emily Heffter, PR specialist. "The published error rate for homes in that area is about 5 percent -- the difference between what Rascoff paid and the Zestimate is about 7 percent."
About the Author
