Seattle-Based Zillow Hit With Major Class-Action Lawsuit

Seattle-based real estate giant Zillow has been hit with a major class-action lawsuit.

The lawsuit claims hidden fraudulent practices

According to Real Estate News and Geekwire, the suit has to do with the Zillow Flex referral program. It charges agents up to 40% for a successful transaction. The suit says the company maintains high and inflexible commissions.

The suit, which was filed in Superior Court in Western WA, claims Zillow has 66 percent of the US real estate market share. Potential buyers on the Zillow site, says the lawsuit, are tricked into thinking they're interacting with a listing agent when they click on "agent" but instead are getting a Zillow-affiliated agent.

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The lawsuit says the company practices and website trick people into signing up with a Zillow Flex Program agent, and if the sale or purchase happens, Zillow gets 40 percent, a payment on the back-end that is not disclosed to all the parties involved, according to Real Estate News.

According to Real Estate News, and Geekwire:

“If buyers were directed to sellers‘ agents, they would be better positioned to negotiate a lower purchase price, because the seller would not have to pay commissions to the seller’s agent and the buyer’s agent,” the complaint says."

The suit also claims Zillow's listings "defrauds" buyers via its Listing Access Standards, from the methods used to post homes on Zillow.com. The class-action suit was filed by a Portland Zillow client who purchased a home in 2022.