USA TODAY and Yahoo may earn commission from links in this article. Pricing and availability subject to change.Zillow classaction lawsuit claims company deceives consumers with hidden agent fees Maddie McGay, NorthJersey.
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Maddie McGay, NorthJersey.comOctober 2, 2025 at 2:28 AM
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Zillow, the nation's leading real estate company, is facing a class-action lawsuit for allegedly tricking consumers into using agents affiliated with Zillow through its Flex and Premier Agent programs, resulting in inflated commissions and home prices.
In the lawsuit, filed on Sept. 19 in U.S. District Court for the Western District of Washington, Plaintiff Alucard Taylor said he purchased a home in Portland, Oregon, in July 2022 using a Zillow-affiliated agent.
According to the complaint, Taylor clicked the "contact agent" button next to a listing he was interested in and assumed he was contacting the property's listing agent. Instead, he said he was connected with a Zillow-affiliated agent.
The Zillow website is reflected in the logo of the Zillow app, in Washington, DC, on February 15, 2023.
The suit claims that after connecting with a Zillow-affiliated agent, consumers are directed to sign Zillow's Touring Agreement. This is a seven-day, non-exclusive contract that allows real estate agents to assist buyers with specific property tours without a fee or commitment to a long-term agency relationship, according to Zillow's website.
"The 'Touring Agreement' promises the buyer that the agent's services are 'free,' but this is deceptive and not true: if the sale goes through, the buyer's agent still receives a commission," the filing states. "In addition, if the Zillow-affiliated agent is a 'Flex' agent, he or she has to pay Zillow up to 40% of the agent's commission. This cut of the commission, for no services rendered related to the real estate sale, is never disclosed to the buyer or the seller."
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If buyers were directed to the property's listing agent instead of a Zillow-affiliated agent, the lawsuit argues buyers "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 claims that Zillow-affiliated agents are incentivized to prioritize receiving their full commission, as they effectively receive a 1% commission after paying Zillow's fees and commissions to their firms and "have no practical flexibility in negotiating a lower commission."
"Sellers are stuck with paying 6% commission (or more) because the buyer Flex agent is receiving such a paltry sum in return, thereby increasing the purchase price of the home for the buyer," the filing states. "Zillow's scheme has the intent and the effect of unlawfully maintaining high and inflexible commissions that drive up the prices that buyers must pay."
The complaint claims that Zillow's listing standards policy, which requires home listings be entered into the MLS within one business day of being marketed in order to appear on Zillow, further "inflate the unjustly earned profits Zillow receives from its deceptive conduct, as it continues to increase its dominance of the market."
The lawsuit claims that Zillow's practices have violated the Washington Consumer Protection Act and the Real Estate Settlement Procedures Act; and that the company has been unjustly allegedly profiting from hidden fees.
The suit seeks to represent all U.S. consumers who purchased a home listed on Zillow between Sept. 19, 2021 to the present while being represented by a Zillow-affiliated agent. It requests damages, disgorgement of Zillow's profits and injunctive relief to prevent Zillow from continuing these practices.
"This complaint fundamentally misrepresents how Zillow operates and the value we've delivered to buyers, sellers and real estate professionals for nearly two decades," a Zillow spokesperson told NorthJersey.com, part of the USA TODAY Network, in an email statement. "Contrary to its claims, we stand by our long held belief that buyers and sellers deserve to have the choice to work with an agent who is committed to their best interests and only represents them. We will vigorously defend ourselves against these claims."
Maddie McGay is the real estate reporter for NorthJersey.com and The Record, covering all things worth celebrating about living in North Jersey. Find her on Instagram @maddiemcgay, on X @maddiemcgayy, and sign up for her North Jersey Living newsletter. Do you have a tip, trend or terrific house she should know about? Email her at [email protected].
This article originally appeared on NorthJersey.com: Zillow lawsuit: Company allegedly used hidden agent fees
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