Peter Corbett
The Arizona Republic

A state agency’s efforts to stop Zillow .com from offering property-value estimates in Arizona are drawing criticism from some Realtors who think regulators are overstepping their authority.

The critics also are targeting an Arizona Board of Appraisal reform bill they fear will muzzle anyone from offering an opinion about property values unless he or she is a licensed appraiser, Realtor or attorney.

Phoenix real estate broker Greg Swann said that the legislation, Senate Bill 1291, is narrowly written to block Zillow from offering its estimates. advertisement

It also could affect other online services from offering property-value estimates using what are called automated valuation models, he said.

“This is legislation to stop progress,” said Swann, adding that state regulators are being Luddites in trying to halt the advance of Internet commerce.

The Arizona House is expected to consider the bill on Monday, said Deborah Pearson, director of Arizona Board of Appraisal.

The legislation is not aimed at Zillow but rather is intended to update statutes that have not changed since 1991, Pearson said.

Realtor Swann of www. BloodhoundRealty.com, said that the bill is so tightly written that two neighbors talking to each other about a neighbor’s property technically would be in violation of the law.

Pearson said exemptions in the law would permit neighbors to talk about property values.

The controversy about appraisals erupted in the wake of the state’s efforts to stifle Zillow. The Board of Appraisal, in June and November of 2006, sent cease-and-desist letters to Seattle-based Zillow, ordering it to stop offering its property-value estimates, which have made it one of the most popular real estate Web sites since its launch in February 2006.

The board said that Zillow cannot offer opinions of value without having an appraiser license.

Zillow continues to offer its estimates in Arizona, and nationwide.

“We strongly believe that providing ‘zestimates’ in Arizona is completely legal, and in fact an important public service, given that (they) are the result of our automated valuation model, and are not a formal appraisal,” Zillow President Lloyd Frink said.

The Board of Appraisal has referred the matter to the Arizona Attorney General’s Office, which declined to comment.

Several critics, including Jay Thompson, a Realtor in Mesa, said that Zillow has been singled out even though other services, such as www.real estateabc.com, also offer property-value estimates online.

The Board of Appraisals has not found any other online entities that are violating the state law, said Pearson, the board’s director.

Thompson of Century 21 Aware Realty said people understand that the Zillow estimates do not take into account all the variables that affect property values.

“They’re not trying to take the place of appraisers,” he said. “They don’t know if your neighbor’s house is painted purple or his dog barks all night.”

The Board of Appraisal ought to have more important things to worry about other than online appraisals, Thompson said.