Real Estate Corporate

Zillow says their “fix zestimates” contest predates lawsuits against Zestimate

Zillow Zestimate

(CORPORATE) Zillow is in the midst of a few lawsuits concerning their feature which they are concurrently holding a contest to fix.

Zillow contest

Last week, Zillow launched a prize contest to inspire the brightest scientific minds to compete to improve the Zestimate® home valuation algorithm.

The contest offers a $1 million dollar prize to the participant who can build the best alternative.

Timing is everything

The timing of this contest seems fortuitous for Zillow, who has been the subject of two different lawsuits this month regarding their online home value estimates, which rely on an algorithm to give an estimated home value.

Both lawsuits were brought in the state of Illinois, and both claim that Zestimates meet the legal criteria for an appraisal, and Zillow doesn’t have the licensure to publish such numbers.

Additionally, disparities between actual home prices and these estimates can create losses in value and losses of time when sellers try to move their home at a price higher than the Zestimate.


Zillow’s language around their proprietary estimate states that the tools is a starting point in determining a home’s value and is not a formal appraisal.

However, through the contest, it is clear that they are recognizing it lacks value even as a starting point to assess the value of one’s home.

It’s not hard to see why, given the aforementioned example. Zillow has yet to comment officially on the relationship between the lawsuit and the contest. If they do, don’t hold your breath for an answer other than “they aren’t” or “no comment.”

How to win

The Zestimate competition works in two rounds. In round one, which is completely open to public entry, participants will design a model to improve the Zestimate residual errors. Then, the participants whose algorithm reduces the difference between the Zestimate and the actual sales prices the most will move on to the finals.

According to information about the second round, that will include the 100-best models.

In order to claim the prize, those 100 competitors have to build an algorithm to predict the actual sales price of homes, using innovative data sources to engineer new features that will give the model an edge over other participants.

Saved by the algorithm

This competition could be a fabulous way for someone with a data science background to make a mark with their brand. More importantly, if the contest works, it looks like the days of Zestimate as a headache could be a thing of the past.


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