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Zillow, one of the nation’s leading real estate companies, is facing a class action lawsuit that allegedly plagues consumers to use agents affiliated with Zillow through the Flex and Premier Agents program, with committees and home prices rising.
In a lawsuit filed in U.S. District Court for the Western District of Washington on September 19, plaintiffs from Alucard Taylor said they used an agent affiliated with Girow to buy the home in Portland, Oregon in July 2022.
According to the complaint, Taylor assumed he was contacting the property’s listing agent by clicking the “Contact Agent” button next to the list he was interested in. Instead, he said he was connected to an agent belonging to Zillow.
The lawsuit alleges that consumers are being directed to sign a tour deal for Zillow after connecting with agents associated with Zillow. According to Zillow’s website, this is a 7-day non-exclusive agreement.
“The “tour agreement” promises the buyer that the agent’s services are “free,” but this is deceptive and untrue. If the sale passes, the buyer’s agent will still receive a fee,” Filing said. “In addition, if the agent belonging to Zillow is a ‘Flex’ agent, he or she must pay Zillow up to 40% of the agent’s fee. This reduction in this committee will not be disclosed to buyers or sellers as there were no services related to real estate sales. ”
If a buyer is directed at a real estate listing agent in place of an agent affiliated with Zillow, the lawsuit argues that the buyer is in a position to negotiate a lower purchase price, as the seller does not have to pay a fee to the seller’s agent and the buyer’s agent.
The complaint argues that agents affiliated with Zillow are encouraged to prioritize receiving full fees because they “have no practical flexibility in negotiations with lower committees” because they effectively receive a 1% fee after paying Zillow fees and committees to the company.
“Sellers are persistent in paying a 6% commission (or more) because the buyer’s flex agent receives such a small amount in return, which increases the purchase price of the buyer’s home,” Filing said. “The Zillow scheme has the intention and effect of maintaining high and inflexible fees illegally that increase the prices that buyers have to pay.”
The complaint further argues Zillow’s listing policy, which requires that household listings be entered into MLS within one business day of being sold to appear on Zillow, claiming that “Zillow continues to increase its market control, inflates the unfairly acquired profits that Zillow receives from deceitful conduct.”
The lawsuit alleges that Zillow’s practices violate the Washington Consumer Protection Act and the Real Estate Settlement Procedures Act. And it is said that the company is profiting from hidden fees.
The lawsuit is represented by agents affiliated with Zillow on behalf of all US consumers who purchased the home listed on Zillow during September 19, 2021. We demand damages, disgust of Zillow’s interests and injunctive relief to prevent Zillow from continuing these practices.
“The complaint fundamentally misrepresents how Zillow operates and the value we have provided to buyers, sellers and real estate professionals over nearly 20 years,” a Zillow spokesman told Northjersey.com, part of the USA Today network, in an email statement. “Contrary to that claim, we agree with the longstanding belief that buyers and sellers deserve to be committed to their best interests and to make the choice to work with agents who represent them alone.
Maddie McGay is a real estate reporter for Northjersey.com and Records, covering everything worth celebrating about life in North Jersey. Find her on Instagram @maddiemcgay, x @maddiemcgay and sign up for her North Jersey Living Newsletter. Are there any tips, trends, or great homes she should know? Email her to mmcgay@gannett.com.
