Real estate lawyers in Utah examine Zillow issue

Okay, it’s not Zillow per se, but listing portals such as Trulia and Zillow are raising questions for realtors and real estate lawyers in Utah, Texas, California and across the country. According to this article in a realty news source online, a Los Angeles multiple listing service and the Austin Board of Realtors (ABOR) are beginning to shy away from and even sever ties with consumer websites like Zillow and Trulia. Both listing sites, or “portals” like these (as well as syndicators like ListHub and Postlets) are beginning to pose serious problems for agents and homebuyers alike in their continuing misrepresentation of data in regards to for-sale properties.

For the last several years, these sites have been powerful advertising tools for real estate agents. Zillow itself boasts over 70 million unique visitors each month. That’s powerful exposure for realtors selling property, but real estate lawyers in Utah and places like California where property prices aren’t just pocket change point out that errors on such websites could have consequences far beyond retracting a misprint.

Realtors are licensed to represent properties for sale by a strict code and according to specific classifications, as determined by their state’s licensing board. They also pledge to abide by code of ethics to correctly represent information about properties and transactions; consumer sites are not. There’s a reason why realtors are required to take several courses in order to obtain licensure: consequences of code violations and misrepresentations impact agents’ reputation and privilege to represent real estate transactions in their according states. Especially in areas of the country with booming markets, the threat of litigation from misrepresentation is real.

Real estate lawyers in Utah like R. Tee Spjute understand all too well the trouble an agent can be in if she knowingly facilitates a fraudulent contract with a buyer—and to be fraudulent, it need only be incorrect. But consumer sites like Zillow and Trulia add a layer of complexity to the challenge. Whether they are they able to be held legally responsible for misrepresenting a property is unclear and without current legal precedent. When the house down the block with four full bathrooms and one half bathroom gets posted to Trulia as “four and half bathrooms,” or “five bathrooms,” or even “four bathrooms, one partial,” the ambiguity gets confusing, and someone may be in big trouble.

But who? Untangling the responsibility between seller, agent, brokerage, MLS or listing portal would be a monumental task, real estate lawyers in Utah like Spjute warn. And the cost associated with such litigation, especially in places like California, could almost be more than the property’s original value. When getting to court costs about $100,000 without fees associated with trial or any settlement, it’s a pricey question to address.

The problem agents across state lines seem to agree on is that by using sites like Zillow and Trulia, the information you submit about properties is subject to error in the way it’s posted. It’s getting too risky for a Los Angeles MLS and ABOR. Who else will follow in their disassociation from these listing portals?