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Zillow said the trend reflects affordability pressures, high mortgage rates and weak demand across the country.
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A new report from the Consumer Policy Center argues that referral programs through companies like Zillow, Realtor.com, and Redfin are contributing to high commission rates and impacting the quality of service agents provide to consumers.
The report, titled “Commission-Based Housing Placement Services: Consumer Implications and Proposed Reforms,” was authored by CPC Senior Fellow Stephen Brobeck and Fellow Wendy Gilch. It found that an estimated 80% of all home sales come from referrals.
This report considers several forms of referral fees, including agent-to-agent referrals. The group argues that commission-based referral programs through major real estate platforms, which can charge up to 40% of the proceeds to the program’s brokers when a deal closes, are particularly harmful to buyers and sellers.
They found that agents who pay up to 40% of their commissions in referral fees are less likely to negotiate lower commissions. Similarly, agents may be incentivized to make buyers pay more for a home in order to earn higher commissions, or may provide lower quality service for lower-priced transactions.
It also alleges that these companies and agents violate their fiduciary duties because the “contact agent” buttons on some real estate portal sites connect consumers to purchasing agents without clearly disclosing the referral relationship.
“What struck me was how much risk and cost consumers are taking on by using these referral services that charge agents 30% to 40% for referrals,” Brobeck said. “We are not against referral fees, but this percentage is too high.”
The report names Zillow as the most prominent company with a commission-based referral program, noting that the company facilitates more than 1.4 million buyer connections annually through its Premier Agent program and approximately 10% of all home sales through its platform.
A Zillow spokesperson disputed the report, saying it had little to no evidence for its claims and relied heavily on anonymous online comments rather than verified sources.
“Referral fees are a business expense, and agents pay for marketing in the same way they spend thousands of dollars on billboards, print ads, and other marketing tools,” Zillow said. “More than that, there is no evidence in this report that the cost of referral fees actually impacts commissions.”
Zillow also said that consumers’ buying experience will not be negatively impacted when working with affiliated agents, as the company connects potential buyers with agents with a strong track record.
The report also names major platforms such as Realtor.com and Redfin as strong players, as well as companies such as Ramsey Trusted Agent, HomeLight, Sold.com., Home and Money, and Agent Pronto.
This is not the first time the impact of commission-based referral fees has been considered in recent months. A class action lawsuit filed against Zillow in November 2025 accuses the company of deceiving buyers into working with Zillow-affiliated agencies and concealing large referral fees.
The report calls for mandatory up-front disclosure of referral fees and urges consumers to think twice before contacting referral services.
“I would like to see buyer’s agents disclose if they are compensating Zillow, Realtor.com or other referral companies, and at what percentage,” Brobeck said. “Fees have to be disclosed, so it’s fairly easy for consumers to understand what’s going on financially.”
Maddie McGay is a real estate reporter for NorthJersey.com and The Record, covering everything that’s worth celebrating about living in North Jersey. Find her on Instagram @maddiemcgay or X @maddiemcgayy and sign up for the North Jersey Living newsletter. Have a tip, trend, or great home she should know about? Email MMcGay@gannett.com.
