Zillow.com: So bad it ought to be banned?

The National Community Reinvestment Coalition has accused red-hot real-estate site Zillow.com of publishing estimated home valuations -- called Zestimates -- that are so abominably bad that they amount to consumer fraud. Moreover, the group claims that these Zestimates are discriminatory, too, in that they are more inaccurate in predominantly black and Latino communities.
 
The NCRC wants the Federal Trade Commission to simply pull the plug on Zillow, put them right out of business (a prospect that is sure to alarm the venture capitalists who have sunk $57 million into the company).
 
You can read the group's full complaint here.
 
The New York Times this morning has a story about the matter here.
 
And a Zillow executive responds in some detail on the company blog.
 
The Times story suggests at several junctures that the NCRC complaint is long on rhetoric and short on specifics, an assessment that my reading of its 12 pages would tend to support. What the group appears to be asking of the FTC is to rule that licensed appraisers -- and only licensed appraisers -- should be allowed to market in the types of information that Zillow last month dished up to some 3.5 million visitors.
 
That's a tough sell in the Internet age.
 
Zillow argues that it's only providing information that is already publicly available and that while its Zestimate does involve a proprietary algorithm, the company makes no claims as to the output being an official appraisal. In fact, Zillow prominently advises visitors that the Zestimate is not an appraisal.
 
The site has drawn legions of bitter of critics over and above the NCRC, but buyer (and seller) beware would seem to suffice here.
 
And I say that as someone who has recently sold and bought homes under the watchful eye of Zillow. You can check out my initial fears that our Zestimate was alarmingly low. And then read about the relatively happy ending here.