Zillow Inc (Z): Is It Digging Itself a Deep Hole?

Seems like a pretty sketchy model to grow on, but there are additional problems that may leave customers facing sticker shock when they price their own projects. Digs offers estimates for just 33 metropolitan areas, and adjusts those figures using data culled from federal wage and hourly rates to come up with a customized option. That may not actually provide a valid, real-world assessment.

Punch list
Certainly a service has to start somewhere, and Zillow Inc (NASDAQ:Z)’s Digs service could be a launching pad to grow the estimates business larger. But if the quality of the numbers is in question, and consumers find they can’t rely upon them for their own particular projec,t then it could end up bringing down trust in the company as a whole.

Right now, homebuyers use a Zillow Inc (NASDAQ:Z) estimate as their starting point for negotiations because, even with the alleged errors, omissions, and limitations, there’s still a lot of meat. With the Digs service, however, homeowners may find that when they use an estimate as the basis for their negotiations, they’ll find that they’ve dug themselves into a hole instead.

The article Is Zillow Digging Itself a Deep Hole? originally appeared on Fool.com and is written by Rich Duprey.

Fool contributor Rich Duprey has no position in any stocks mentioned. The Motley Fool recommends Zillow. The Motley Fool owns shares of Zillow.

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