Z
illow faces a fresh class‑action lawsuit from Hagens Berman and Cohen Milstein, who claim the real‑estate portal’s Flex referral program inflates buyer costs. The complaint, filed in the U.S. District Court for the Western District of Washington, accuses Zillow of acting as a monopoly—controlling roughly 66 % of the U.S. online residential‑real‑estate market—and of engaging in deceptive practices that raise commissions for agents and buyers alike.

    According to the draft complaint, Zillow’s Flex program pays agents up to 40 % of their commission for each transaction. In 2023, referrals through Flex generated more than $2 billion in revenue for Zillow. The suit argues that this arrangement forces agents to accept lower net earnings, which in turn pushes sellers to pay higher commissions (often 6 % or more) and drives up home prices. Buyers, unaware of the hidden 40 % cut, are led to believe they are working with the listing agent when they click “Contact Agent.” The complaint states that if buyers were directed to the seller’s agent instead, they could negotiate a lower purchase price.

    A Portland, Oregon, plaintiff purchased a home in 2022 using a Flex agent identified as “R.H.” The suit contends that the buyer felt he had no alternative but to use that agent, and that Zillow’s policy of steering buyers toward Flex agents “tricks” them into paying inflated commissions. The complaint also targets Zillow’s new Listing Access Standards, which bar listings that have been publicly marketed for more than one day but are not widely available through the MLS or syndication. The plaintiffs allege that this rule forces sellers to post on Zillow immediately after advertising, thereby increasing Zillow’s profits and “defrauding buyers.”

    The lawsuit seeks class‑action status for all U.S. buyers who purchased homes listed on Zillow in the past four years through a Zillow‑referred agent. It also accuses Zillow of violating the Washington Consumer Protection Act and the federal Real Estate Settlement Procedures Act (RESPA). The plaintiffs request a jury trial and treble damages, though no specific amount is disclosed.

    Steve Berman, founder and managing partner of Hagens Berman, said Zillow is “well aware of the potential for ill‑gotten gains” and that the firm will hold the company accountable for harming homebuyers. The complaint notes that Zillow’s dominance and its undisclosed referral fees create a “scheme to defraud buyers.”

    Real Estate News has asked Zillow for comment and will report any response. Hagens Berman and Cohen Milstein previously joined the Moehrl antitrust lawsuit against the National Association of Realtors, Keller Williams, Anywhere, HomeServices of America, and RE/MAX, which ultimately settled for over $1 billion.