Where are we...China?

The functionaries at the State Board of Appraisals want to prevent you from accessing zillow.com.  Naturally, this is for your protection. 

An Arizona regulatory board has ordered Zillow.com to stop offering its online estimates of home values.

The Arizona Board of Appraisal has issued two cease-and-desist letters to the popular real estate Web site, claiming Zillow needs an appraiser license to offer its "zestimates" in Arizona.  "It is the board's feeling that (Zillow) is providing an appraisal," said Deborah Pearson, Board of Appraisal executive director.

The Board has a point.  After all, you might decide to buy a house and the bank that wants to loan you a couple hundred thousand dollars may say "you know, we like used to send a licensed guy out there with a camera, tape measure and computer, but that cost like, you know $300, so we've decided to just look at this satellite picture on Zillow.  It says that your house is worth like half a million dollars, so dude, your loan is approved."

Does anyone really think that the information on Zillow could be dangerous?  Are they really providing an "appraisal."  When I call my real estate agent and tell him I want to sell my house and ask him what it's worth, and he says "based on the size and the price that other homes in your area sell for, I think your house would sell for about $275,000."  Is that an appraisal?  Should it be illegal?  Zillow does a lot less than that. 

How about the medical sites?  When someone wants to identify a rash that won't go away, or learn the signs of a stroke, and she goes to MyDoctor.com, is that website practicing medicine without a license?  If you look up information on living wills or bankruptcy, is that site practicing law without a license?  Maybe those sites should be shut down for your protection. 

The State Appraisal Board is actually exhibiting the symptoms of classic regulatory capture.  The Board was designed to protect consumers from appraisers.  The board has morphed, as most boards of this type do, and it is now protecting appraisers from consumers. 

Knowledge is power and the Internet has empowered consumers.  Your travel agent, newspaper reporter, financial planner, banker, doctor, lawyer, accountant and, yes, appraiser, used to have a monopoly on information.  The Internet is empowering consumers of those products and now the government agencies that were designed to protect you are using the power of the state to protect the industries they once regulated. 

If the Appraisal Board has lost sight of its mandate, perhaps it has outlived its useful life. 

Comments

[Tim]

Tape measure? Real appraisers don't need no stinkin' tape measures! One appraiser "measured" and said my house was 10 rooms and 2,805 sq ft. I refinanced 18 months later and the second appraiser "measured" it to be 2,682 and 8 rooms. Two rooms and 123 sq ft disappeared.

But hey, the new appraisal was only sown by 5%, and on a $500k house that's $25,000, so I guess my oldest is just going to have to skip his last two years of college.

The lender refused to "monkey" with the "legal appraisal" and I am out a sizeable chunk of my net worth. It was the same lender on both deals and the lender hired both appraisers. Now I have a better understanding of what happened to Fife Symington...

[George Smith]

Glad you wrote about this, Greg. This was one I couldn't let pass, but now I don't need to write a letter to the editor!

My appraisal story: I refinanced my last house. According to appraisal that came back, I didn't have a kitchen.

[Gilbert_Sundevil]

This goes right along with that stupid pest control board that wouldn't let the teenagers make a couple of extra bucks by puting screening on the outside of people's homes to prevent roof rats from invading.

Initially set up to protect the "consumer" and ends up protecting the businesses from competition.

What a crock!

[Aaron]

One of the reasons we are in this housing mess in the first place was because appraisers were finding creative ways to make a house fit a certain mark so it could reach the sales amount...does anyone really believe there was no malfeasance ever when homes were selling through the roof? The zillow website is an informative tool in the same vein as Kbb.com is for cars.

[ron]

I have an appraisal story from a couple of years ago. I reported the appraiser to the state board who monitors people like this - they let him off the hook. So much for protecting the public.

ron

[Chris]

Wow.I use Zillow alot and love its features.
What can we do to stop the board from doing this?

[BobH]

>What can we do to stop the board from doing this?

What I'd like to know is what the Board thinks they're going to do. Are they going to put up a border fence to keep Zillow's pixels from sneaking into Arizona computers?

People who trust government to act sensibly, take heed.

[Jay Thompson]

Appraisers apparently fear Zillow. I *know* real estate agents fear Zillow (I am an agent). I don't understand WHY so many do, but they do.

I talked to a reporter from BusinessWeek today about this AZBoA "issue". It's ludicrous, at best.

http://www.businessweek.com/bwdaily/dnflash/content/apr2007/db20070420_746047.htm?chan=top+news_top+news+index_businessweek+exclusives