Our $1.1M cottage in a celebrity-packed suburb should have been snapped up. But a tiny detail on Zillow lost us a fortune
Andrew and Eri Uerkwitz didn’t think it would be hard to sell their charming family home in a tranquil celebrity-filled enclave.
Set among lush trees on a semi-rural road, the expansive property was a leafy oasis just an hour by car or train from their jobs in Midtown Manhattan.
Andrew worked as head of investor relations for video game giant Electronic Arts, and Eri as a banking and finance lawyer at Mayer Brown.
Their neighbors included Bill and Hilary Clinton, billionaire Bill Ackman, actors Alan Arkin and Ben Stiller and head of Instagram Adam Mosseri.
The couple bought the 2,313-square-foot, three-bedroom, four-bathroom house in Chappaqua, New York, for $1.1 million in June 2022, and expected a similar sell price.
But after they put it up for sale in April, they discovered the listing on real estate behemoth Zillow flagged the house as a 9/10 ‘extreme’ flood risk.
Houses in Chappaqua take an average 21 days to sell, but the Uerkwitz home on Millwood Road languished on the market for months.
Two buyers made offers that the couple accepted, only for them to be withdrawn after the prospective new owners saw the flood rating.
The couple bought the 2,313-square-foot, three-bedroom, four-bathroom house in Chappaqua, New York, for $1.1 million in June 2022, and expected a similar sell price
Eri Uerkwitz, a banking and finance lawyer at Mayer Brown, and her husband claimed Zillow’s incorrect flood risk rating caused buyers to pull their offers on the house
The couple claimed the buyers cited the flood risk as the reason they withdrew their offers, as did others who inquired about the house but decided not to make offers.
The house eventually sold for just $999,000 on August 18, far lower than the $1.15 million it was advertised for, and at a $100,000 loss.
Andrew and Eri sued Zillow and First Street Technology, a climate data and analytics company that compiled the flood risk rating, for $500,000.
The lawsuit, filed on June 18 before the house sold, claimed the flood risk rating caused the house to be ‘stigmatized as materially unsellable at its actual market value’.
‘Plaintiffs’ real estate broker attributes the paucity of prospective buyers that have come through the house to the “extreme risk of flood” designation,’ it claimed.
The Uerkwitzes lost money not just on the sale, but legal fees, holding costs, and ‘additional expenses associated with the extended marketing period’.
Every Zillow listing includes climate risk ratings for flood, fire, wind, heat and air pollution with a score out of 10. The higher the score, the greater the risk.
These ratings are assessed by First Street, which began as a non-profit entity but was reorganized as a commercial enterprise last year.
Buyers can only see the numerical ratings, with access to the detailed climate report only available through a paid First Street subscription.
Andrew Uerkwitz, head of investor relations for video game giant Electronic Arts, and his wife sued Zillow and First Street Technology for $500,000
Zillow listing includes climate risk ratings for flood, fire, wind, heat, and air pollution with a score out of 10. These were the ratings for their home after they listed it
A rating of 9/10 meant the chance of getting one inch of flooding was 18 percent this year, 96 percent in the next 15 years, and 99 percent in the next 30 years.
‘This designation is factually inaccurate, unsupported by any credible source, and contradicted by FEMA flood zone maps, on-site insurance inspections, and the physical characteristics of the property,’ the lawsuit claimed.
‘The property is not located in a FEMA flood zone, has never flooded, does not require flood insurance, and includes topographical and structural features that preclude a credible risk of flooding.’
According to the lawsuit, the property suffered no flood damage during hurricanes Ida and Irene despite one of them being one-in-25-year storms.
The basement also has a sump-up that has never been triggered, and the property has multiple built-in features to prevent flooding.
Even the insurance company, which inspected the house after the Uerkwitzes bought it, did not require an additional flooding policy.
Scientists are highly skeptical of First Street’s climate models, and several studies found they did a poor job of predicting risks for individual properties.
One study found an ‘over-reliance on large-scale hazard model data’ that had ‘inadequate representation of topographic features, flood infrastructure, and other features known to affect patterns of flooding.’
Buyers can only see the numerical ratings with access to the detailed climate report only available through a paid First Street subscription
FEMA, by contrast, gives the property a minimal flood hazard rating
Experts advised homebuyers to take flood risk estimates with ‘a lot of grains of salt’ and that ‘local flood manager who has walked the property will almost always have a better grasp of flood risk than the big, top-down national model.’
Another analysis by Bloomberg found First Street’s flood model only agreed with other models, like FEMA, a quarter of the time.
A National Bureau of Economic Research found flood risk reports ‘influence every stage of the house buying process’ and resulted in changes to sale prices.
Sometime in the past few weeks, Zillow began including the FEMA flood rating alongside the First Street one.
‘A FEMA zone’s risk assessment may be different than the First Street Flood Factor for a property in that zone. Find out why,’ a disclaimer next to it read, with a link to First Street’s explanation.
Neither the FEMA rating nor the disclaimer were present when the Uerkwitzes listed their home, unlike school data, which Zillow notes ‘may not be complete.’
The couple sent a letter through their lawyers on May 23 demanding that the flood risk be changed, but was ignored, the complaint stated.
The lawsuit, which the couple confirmed is continuing, followed soon after and neither respondent has filed a defense so far.
