Glenview lawyer, Schaumburg home builder sue Zillow
A Schaumburg builder is suing Seattle-based Zillow.com for providing home estimates that it says are in violation of Illinois laws.
Family-owned CastleBldrs.com filed the lawsuit Friday in Cook County circuit court stating that Zillow is providing appraisals of properties without adhering to accepted appraisal standards. The case says that Zillow instead uses algorithms to determine numbers, which could be dramatically under an actual appraisal. It is in violation of state laws regarding appraisals because the published numbers are not done according to appraisal laws.
Husband Bhasker T. Patel, wife Jyotsna B. Patel and son Vipul B. Patel, owners of CastleBldrs.com, said in the lawsuit that Zillow's Zestimates are roughly 20 percent lower than the appraised value of their properties for sale. They say that those published reports hurt their chances of getting appropriate compensation for the homes. They are seeking class action status and an injunction against Zillow to stop the Zestimates.
"Vip and his parents hold several properties directly and through CastleBlders.com," said the Patel's attorney, Barbara Andersen of Glenview. "They are all luxury homes in Schaumburg, Barrington and elsewhere, and the Zestimates have become a roadblock for the family trying to sell them."
This isn't the first case against Zillow for similar issues. Andersen filed a lawsuit in late April against Zillow for her own home in Glenview, which she was trying to sell. She had a Zestimate for $650,000. But as soon as she decided to sell it by owner, the Zestimate plunged to $538,000 in two months without explanation. Andersen believed that such a drop hurt her chances of selling the home and she filed a lawsuit against Zillow.
Andersen said Zillow is not a licensed appraiser in Illinois and never appraised her home.
"People perceive that Zestimate as a number that has value," Andersen said. "and it affects how properties are viewed."
When her own case attracted national attention, even getting on Good Morning America, she heard from numerous builders and homeowners nationwide. That's when she decided to drop her own lawsuit in favor of the CastleBldrs.com case. She said the CastleBldrs.com case is more likely to earn class action status and help other builders and home sellers, she said.
"Zillow should not be disseminating these numbers because consumers will rely on them, when those numbers are inaccurate," Andersen said.
The Patel family and a spokesman for Zillow did not immediately respond for comment.