A new class-action lawsuit alleges that Zillow unfairly inflated home buying costs through its Zillow Flex agent referral program. The suit, filed by Hagens Berman and Cohen Milstein, claims Zillow knowingly allowed agents to collect up to 40% commissions, often undisclosed to buyers and sellers. This practice, critics argue, created a deceptive system where Zillow capitalized on a dominant position in online real estate search, manipulating the market to maximize profits.
The complaint highlights concerns about the program’s incentives, where agents prioritized securing full commissions through the referral program, even if it meant reduced commissions for themselves. This resulted in increased purchase prices for buyers, as the buyer’s Flex agent received a significantly smaller portion of the commission.
Key accusations include Zillow’s deceptive practices when buyers clicked the “Contact Agent” button, leading them to Zillow-affiliated agents rather than direct sellers. Additionally, the suit criticizes Zillow’s Listing Access Standards, arguing they were strategically implemented to force listings onto Zillow.com, further benefiting the company’s revenue stream. The lawsuit alleges this created an unfair advantage, manipulating the market to inflate Zillow’s profits.
The class-action lawsuit seeks compensation for U.S. buyers who purchased homes listed on Zillow within the last four years using agents referred through the platform. The suit also cites violations of the Washington Consumer Protection Act and the federal Real Estate Settlement Procedures Act (RESPA), seeking a jury trial and triple damages.