By Mike Scarcella
Copyright reuters
CompaniesCohen Milstein Sellers & TollCompass IncZillow Group Inc
Sept 22 (Reuters) – Zillow (ZG.O), opens new tab, the largest U.S. online real estate portal, is facing a new proposed class action accusing the company of deceptively using property listings to steer home buyers to its network of affiliated agents.
The lawsuit, opens new tab, filed on Friday in Seattle, claims Zillow is misleading prospective buyers into contacting agents working with Zillow and not the agent who listed the home for sale.
The plaintiff, an Oregon resident, alleged Zillow’s practices violate a Washington state consumer protection law and a federal real estate law.
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“Zillow is well aware of the potential for ill-gotten gains in this space and has sought to play fast and loose when real people’s basic need of housing is on the table,” said Steve Berman, a lead attorney on the lawsuit.
Seattle-based Zillow in a statement said it will defend against the claims and called the lawsuit a fundamental misrepresentation of how the company operates. The company said it stands by its “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.”
Zillow has disclosed it receives about 227 million unique visitors a month, and received 2.4 billion visits between January and March.
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The plaintiff seeks to represent at least tens of thousands of home buyers who used Zillow-affiliated agents since 2021.
According to the lawsuit, Zillow takes 40% of the commission from some of its agents, a cut that is hidden from the buyer and seller. The complaint said the alleged arrangement incentivizes agents to prioritize their commissions at all costs.
“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 lawsuit said.
Zillow is facing other lawsuits over its business practices.
In June, brokerage Compass (COMP.N), opens new tab sued Zillow in federal court in Manhattan, seeking an order that would allow Compass to market some homes more exclusively. Zillow has denied the allegations in the case, saying that hidden listings limit consumer choice.
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The case is Alucard Taylor v. Zillow Inc, U.S. District Court, Western District of Washington, No. 2:25-cv-01818.
For plaintiff: Steve Berman and Jerrod Patterson of Hagens Berman Sobol Shapiro, and Douglas McNamara and Theodore Leopold of Cohen Milstein Sellers & Toll
For defendant: No appearances yet
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Reporting by Mike Scarcella
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