In the real estate business, Zillow Group Inc. says its algorithms are learning to capture not only the crude facts about values in the surrounding neighborhood but also more sophisticated price indicators, such as whether the living room has hardwood floors or the kitchen has granite countertops. While Zillow’s software isn’t used in appraisals—its numbers are available on its website for free—lenders have long used internal and third-party computer models to help value homes.
And now mortgage financers such as Freddie Mac are starting to get comfortable with transactions that don’t involve a human appraiser.
Zillow CEO explains some of the variables that go into the algorithms that calculate its Zestimate
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