Buyers and sellers are being warned to use online tools such as one of the nation’s top real estate sites, Zillow.com, with caution.

At a recent Long Beach, California conference Allan Dalton, president of Realtor.com charged Zillow and its co-founder Lloyd Frink of “parlor game” tactics which often leads to inaccurate data. Reported on PressTelegram.com, Dalton went on to say, "This is fitting to have this disccusion here near the peir in Long Beach, where people used to go to have their weight guessed."  Dalton said sites like Zillow should only offer information such as comparible sales and put that information under a heading that makes it clear that consumers are getting a ballpark valuation and they should seek professional help when buying or selling a home.

On antoher front, as reported in the New York Times, Zillow came under attck from the National Community Reivestment Coalition.  In a letter to the federal Trade Commission the NCRC asserted that Zillow's website misrepresented home values and placed residents in low-income neighborhoods "more at risk for discriminatory and preditory lending practices.

Zillow.com provides online estimated home values called “zestimates” and although Frink admitted “zestimate” errors of as much as 7.2 per cent; he defended the website by stating that Zillow encourages consumers to get professional assistance.  Zillow refutes the NCRC charges.  Spokeswoman, Amy Bohutinsky, said the site’s valuations were intended for consumers and had never been marketed to real estate professionals. The company sees the tool as a way to empower consumers who in the past would have to rely on a real estate agent to make an estimate based on the sales of comparable homes in a neighborhood.  

I have to agree with the posting on the web log Valleywag.com; “The brilliant bit is that Zillow's best defense is, "Our system is inaccurate all over," only slightly mitigated by their other defense, "These numbers aren't serious estimates."  Like most free-information sites -- like Wikipedia, Google, or uppity tech blogs -- Zillow secretly thrives on overconfident users.”  All I can say is Caveat Emptor.