Remove Negative Remarks About the Client

[Fred]

As far as the model being good but the "incorrect" Zestimates being the result of bad data, well, tough. The Zestimates for this county are completely unreliable.

I have no idea whether it is because of bad data or their model because, like every other AVM I have seen, it is a black box AVM. There is no way to know the strengths and weaknesses of it unless they publish their methodology.

The accuracy of an AVM is not difficult to determine.

That's what I thought you meant by 50%. Instead of a value of 60, the value was 90. Also, I would suggest it is important whether the output error is biased or random: is it consistently wrong in one direction, or just all over the place.

My only concern for you, is that if you produce something, produce something well-wrtten. Try to appreciate there is a difference between the valuation model and the data. If you refer to one as the other carelessly, you give your potential rebutter too much ammunition.

A friend of mine inherited a house in California a few years ago, and his lawyer mentioned getting an appraisal, so he asked me for advice. I looked up the property on Zillow, and found the software to be amazing. However, I detected a problem with the model. I said to my friend either all the houses in good condition sold first, or this market is going up sharply. The Zillow value is the same one I get with averaging or regression without time adjustments. However, when I put in time adjustments the value goes from 570 tp 630. The next week he got an appraisal that came in at 620, using two of the ten sales I used from Zillow. After that he called a broker to list the house who said 635, without knowing that my friend had done some research.

I seem to recall that there were some tabs on Zillow where one could get ratings of the overall economics of the area with respect to housing. While it looked "nice," in my opinion, it was no substitute for actually at the prices and square-foot prices to see the trend is up, down or flat. In this particular case, I believe the data was sound, but the model was off, because it didn't do time adjustments.

I agree with you the problem is the "black box" component. That is, they are not disclosing a big chunk of the scope of work. This is part of what amazes about the ASB's incomprehensible opinion that these people are not doing appraisals. Of course they are. And because the reporting is sub-standard (not disclosing scope), we can't really assess the problems. For example, given the software's capability, there is no reason that they don't generate the same analysis that you did; along with the ten sales, they could present what the model predicted for those properties. Wouldn't that tell their users something signficant?

 

[EVAUSA]

I stated that information provided by the AVM was outright fradulent. Now the AMC wants me to remove the negative statement about the lender. Is this a negative jab at the lender or an unfortunate truth backed up by concrete evidence? Should I hold my ground or remove the statement?

Were appraisers, just state the facts and let the reader come to their own conclusions regarding fraud.

 

[Bama Bayou]

That's what I thought you meant by 50%. Instead of a value of 60, the value was 90. Also, I would suggest it is important whether the output error is biased or random: is it consistently wrong in one direction, or just all over the place.

While I'm working on a larger sample now, this is the result of a smaller one.

This is a repost of mine from the middle of May:

Just for kicks, I decided to compare recent sales in two of my local markets to Zillow estimates. The sales data comes from the MLS using all the SFR sales between 4/12/2008 and 5/12/2008 in zip codes 36561 and 36542. They were not cherry picked to make Zillow look bad, no reason to. A total of 17 sales took place and Zillow was able to "Zestimate" 11 of them. Here are the results. They were off actual sales price by an average of 51%. The range was 10% to 136%. All were over valued-not a single one had a Zestimate less than actual sales price.


5531 Bear Point Avenue, 36561, closed 4/23/2008 for $125,000.
Zestimate: $180,000
Zillow over values 44%

5587 Pensacola Avenue, 36561, closed 5/5/2008 for $127,625.
Zestimate: $206,000
Zillow over values 61%

24722 Gulf Bay Road, 36561, closed 4/23/2008 for $131,000.
Zestimate: $206,000.
Zillow over values 57%.

2363 Twin Pines Circle, 36562, closed 5/2/2008 for $132,000
Zestimate: $223,500.
Zillow over values 69%

18788 Chelsi Lane, 36542, closed 5/12/2008 for $169,900.
Zestimate: $212,000.
Zillow over values 25%

5525 Ornacor Avenue, 36561, closed 4/18/2008 for $180,000.
Zestimate: $197,500.
Zillow over values 10%.

1209 West Lagoon Avenue, 36542, closed 4/17/2008 for $185,000.
Zestimate: $437,000.
Zillow over values 136%.

356 Savannah Lane, 36542, closed 4/25/2008 for $200,000.
Zestimate: $228,500.
Zillow over values 14%.

4697 Osprey Drive, 36561, closed 5/2/2008 for $284,900.
Zestimate: $419,000.
Zillow over values 47%.

4117 Harbor Road, 36561, closed 5/8/2008 for $295,000.
Zestimate: $372,000.
Zillow over values 26%.

4336 Hwy 180, 36542, closed 4/18/2008 for $589,775.
Zestimate: $1,012,000.
Zillow over values 72%.

 

[Mike Boyd]

Accusing an entity of fraud is liabelous because it insinuates intent to commit fraud and could wrongly damage an entity's reputation. I would remove the verbiage. State the facts and be done with it. Then, if you feel strongly enough, you can report their actions to the authorities. However, one example of erroneous information proves nothing. It's easily explained as a mistake. Perhaps Pam would be interested. Maybe she has other examples that together really prove something. *shrugs*

I agree. It is outrageous to act as police, judge and jury by calling something a fraudulent act while working in the capacity of an appraiser.