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

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

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Zillow Zestimate

Zillow contest

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

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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.

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.

#Zestimate

Born in Boston and raised in California, Connor arrived in Texas for college and was (lovingly) ensnared by southern hospitality and copious helpings of queso. As an SEO professional, he lives and breathes online marketing and its impact on businesses. His loves include disc-related sports, a pint of a top-notch craft beer, historical non-fiction novels, and Austin's live music scene.

Real Estate Corporate

To reinvent leasing, Airbnb is creating branded apartments

(CORPORATE NEWS) Airbnb originally set out to disrupt the leasing world but has decided now to just reinvent it.

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Airbnb doesn’t like being thought of as your friendly neighborhood disruptor and has found a new alternative to the more traditional rented house/apartment/room (or castle, a tiny house, treehouse, converted barn loft, etc…): branded apartment complexes.

San Francisco based home-sharing partner group Airbnb has formed a partnership with Newgard Development Group (known as “Niido Powered by Airbnb”) to create the space-sharing concept, which will be comprised of 324 units, starting with Kissimmee, FL (just south of Orlando) and is slated to be available for move-in sometime in 2018.

The units will have amenities of a hotel such as keyless entry and an app that will allow tenants to check-in remotely. On-demand cleaning and luggage services will also be available, making the process much more streamlined for both guests and tenants.

Upon signing an annual lease, residents may rent out their apartments through Airbnb for up to 180 days, and thus must of course, remain as full-time residents for at least half of the year.

This should help to cut down on issues where landlords were replacing tenants’ leases and rental agreements with a full-time Airbnb gig.

The setup of the branded apartment complex encourages home sharing, and offers a communal environment in which all neighbors are either hosts, or guests.

Okay, so while it kind of sounds like a hotel rather than an apartment, (a timeshare, even) Airbnb does still want to keep that “hominess” aspect that defines the brand, intact. It’s been reported that they will be providing some design assistance, though will remain hands-off in ownership interest in the building.

It’s too soon to say how lucrative a spot in one of these elusive buildings will be or how much a spot will cost, but it can’t be helped to wonder at what point does this sort of expansion stop Airbnb from being… Airbnb?

With this many parties involved, it does sort of lose its charm as being a unique travel experience people have come to expect with Airbnb. I mean, it’s not a yurt in Alaska, after all.

Expansion for the branded apartment complexes will be prioritized in Miami and the Southeast, but is expected to branch out into other cities such as Nashville, TN, Charleston, SC, and “cities in Texas.”

CEO Harvey Hernandez stated that the plan was to build over 2,000 units over the next couple years. Lookout world, The Grand Budapest Airbnbs will be hitting a city near you.

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Real Estate Corporate

KB Home exec is learning to watch his tongue the hard way

(CORPORATE NEWS) Character is what you do when no one is watching and for this KB Homes exec, it is what he said that is getting him in trouble.

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Keep the shade to yo self

Need a life lesson about keeping nasty comments to yourself? Take it from KB Home CEO Jeffrey Mezger.

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This past week, KB Home cut Mezger’s 2017 bonus by 25 percent after profane comments he made about comedian Kathy Griffin came to light.

D-list drama

Mezger, in an audio recording obtained from the security cameras on Griffin’s house, called her a list of not-safe-for-work names after she called the police on him for a noise complaint. This was reportedly one in many noise complaints that she and partner Randy Bick required police assistance over.

Since the incident was reported, Griffin and Bick have filed a restraining order against Mezger.

KB Home, an upscale builder with frequent home price tags in the millions of dollars, made a statement to the press regarding Mezger’s comments, saying the CEO had apologized for his language and that it did not “reflect who his he is or what he believes.” A spokesperson from the company also reported that a further problematic incident would trigger Mezger’s immediate dismissal.

Twenty five percent of nothing

Some who believe in the power of private industry to self regulate problematic behavior hold this action by KB Home as an additional example of the shifting tide of CEO expectations.

Consumers reported in a 2016 Stanford study that it would be appropriate for a company to fire its CEO over “morally questionable behavior” even if said behavior was not technically illegal.

Uber’s former CEO Travis Kalanick was ousted by the company last year after reports of rampant sexism in the workplace were published.

However, some have questioned if this “punishment” has any actual weight behind it, or if it is just for show. For starters, KB Home did not release any data on how much of a salary cut would be–and if it would actually affect Mezger at all. In an analysis from the Los Angeles Times, columnist Michael Hiltzick found that in addition to the lack of baseline bonus information from KB Home, that the CEO has reportedly not received a bonus since 2014. As Hiltzick points out “taking 25 percent of nothing is painless.”

Repercussions to follow

Besides the question of how much the incident will cost Mezger, a larger question looms on how this may potentially affect the KB Home bottom line. Suze Orman, a TV personality and financial advisor, has already taken to Twitter to encourage her followers to not choose KB Home to receive their business.

Long run, it is yet to be seen how much this will affect Mezger and the company he runs, but for the time being it certainly serves as a nice reminder of the adage: “if you cannot be positive, then at least be quiet.”

#KBHome

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Real Estate Corporate

San Diego vs Sandicor: two years in the making

(CORPORATE NEWS) A lawsuit between San Diego area real estate associations and a local MLS, Sandicor, that started in 2016 is finally seeing some progress.

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Alphabet soup

The fight for the fate of an MLS in Southern California is still plodding along, albeit slowly.

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If you’ll recall, the North San Diego County Association of Realtors (NSDCAR) and the Pacific Southwest Association of Realtors (PSAR) are suing the Greater San Diego Association of Realtors (GSDAR) to terminate Sandicor’s status as a legal entity.

Long time coming

Based on some court documentation, after a motion hearing that lasted most of 2016, the case is set to go to trial on September 11, 2018. Additionally, the case is soon poised to enter the discovery phase; a motion for discovery was filed on August 18.

Sandicor is a regional MLS provider owned by the three aforementioned realtor associations.

Back in January, GSDAR sued the other two associations on eleven charges, all with an anti-trust angle to them. According to the plaintiff, the other two associations used their majority hold of the Sandicor board to cut off data access in violation of contracts and pushed the other association out of Sandicor decisions. In that time, the NSDCAR president suggested that GSDAR wasn’t cooperating with attempts to improve the Sandicor system.

Alternatives

A few alternative solutions have been proposed to the dissolution of the regional MLS. GSDAR filed a motion in October asking the court to let them buy out the other stakeholders. Sandicor also filed a motion claiming that the other two stakeholders do not have legal grounds to dissolve the MLS.

Both the PSAR and the NSDCAR filed a motion to dismiss part of the charges against them, but the judge denied that claim.

This means that NSDCAR and PSAR will have to answer for all eleven anti-trust complaints. In March of this year, a motion to continue was filed. An early resolution conference held in March attempted to settle the matter outside of trial, but the conference failed to resolve the issue.

Case details

In the case, the San Diego Association of Realtors is represented by three lawyers, all from Higgs, Fletcher and Mack. The North San Diego County Association of Realtors and the Pacific Southwest Association of Realtors, two defendants in the case, are represented by Procopio, Cory, Hargreaves and Savitch, LLP.

#CaliforniaDrama

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