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What was stopping Zillow from having a human look at the property and adjust the price based on factors that their algorithm didn't consider?

Otternonsenz 5y ago
Nothing, but that would require them hiring an appraiser on each transaction, which would be humbling for them to have to do (and while biased as an appraiser myself, I would not trust anyone else other than a licensed appraiser to do that type of adjustment work, because it’s a daily part of our jobs). Or they could have an internal team of appraisers doing that type of work, but the business might not like it when the appraisers don’t validate their pricing structure because real data does not support it.
- Breza 5y ago
  It's wild that they didn't have human appraisers review at least a sample of the houses to groundtruth the algorithm.
  - Otternonsenz 5y ago
    Greed and wanting to be ahead of others will blind you to truth standing right in your face. While everyday workers at Zillow didn’t have a say in company policy, you can’t tell me that the executives and project managers didn’t know what they were doing or why they were doing it. They didn’t want to be told their idea was bad or couldn’t work (which it did work until it didn’t) early on, so they got the debt they refused to pay through due diligence. And Zillow has been around for almost 20 years, so it’s not like they didn’t have awareness of how the home market works or how to validate pricing metrics. From the outside it fells like willful ignorance, but perhaps they suffer from the same ills any large company trying to “move fast and break things”.
aeturnum 5y ago
What stopped them is that the entire rational for Zillow's approach is that human appraisal isn't needed. An algorithm, they think, should be able to do a good enough job. Any individual person who, when presented with this scenario, thought they should have brought in a human to look at the house does has been selected out of working for Zillow.

Otternonsenz 5y ago

Nothing, but that would require them hiring an appraiser on each transaction, which would be humbling for them to have to do (and while biased as an appraiser myself, I would not trust anyone else other than a licensed appraiser to do that type of adjustment work, because it’s a daily part of our jobs). Or they could have an internal team of appraisers doing that type of work, but the business might not like it when the appraisers don’t validate their pricing structure because real data does not support it.

Breza 5y ago
It's wild that they didn't have human appraisers review at least a sample of the houses to groundtruth the algorithm.
- Otternonsenz 5y ago
  Greed and wanting to be ahead of others will blind you to truth standing right in your face. While everyday workers at Zillow didn’t have a say in company policy, you can’t tell me that the executives and project managers didn’t know what they were doing or why they were doing it. They didn’t want to be told their idea was bad or couldn’t work (which it did work until it didn’t) early on, so they got the debt they refused to pay through due diligence. And Zillow has been around for almost 20 years, so it’s not like they didn’t have awareness of how the home market works or how to validate pricing metrics. From the outside it fells like willful ignorance, but perhaps they suffer from the same ills any large company trying to “move fast and break things”.

aeturnum 5y ago

What stopped them is that the entire rational for Zillow's approach is that human appraisal isn't needed. An algorithm, they think, should be able to do a good enough job. Any individual person who, when presented with this scenario, thought they should have brought in a human to look at the house does has been selected out of working for Zillow.