Zillow has filed a motion to dismiss a class action lawsuit alleging that the Zillow Flex and Zillow Home Loans programs violate state and federal consumer protection laws.
“In a motion filed on February 20 in the US District Court for the Western District of Washington, Zillow alleges that, despite plaintiffs’ latest 100-page complaint, their claims lack substance and do not meet the legal standards necessary to move forward.” the company says in a blog post. “This is Plaintiffs’ fourth iteration of their complaint. Zillow’s motion states that, even after all of Plaintiffs’ rewrites to modify and refine their claims, they still do not adequately plead a single claim against Zillow.”
The first complaint, filed in September 2025, related to the portal’s Flex referral program. The plaintiffs alleged that Zillow was not forthcoming with consumers about its referral process, which connected buyers with Flex agents, who pay a 40 percent referral fee. That fee, they said, is passed on to consumers through high commissions, in violation of the Washington Consumer Protection Act.
The complaint was expanded to Zillow Home Loans in November, with plaintiffs alleging that the portal forces Flex members to push its mortgage product on homebuyers in violation of the Real Estate Settlement Procedures Act (RESPA). They also added a Racketeer Influenced and Corrupt Organizations Act (RICO) count to account for brokers’ participation in Zillow’s alleged scheme to inflate consumer costs.
However, Zillow said the class action complaint is based on a “nonsensical” series of events where homebuyers believe they are connected to the agent despite having signed a travel agreement and a buyer agent agreement. And if a homebuyer wanted to contact the agent, the portal said information is “readily available” on each listing page. When it comes to allegedly inflated commissions, Zillow said this is purely hypothetical.
“Plaintiffs speculate that because their agents paid a portion of their commission to Zillow, the agents must have demanded a higher commission rate than an unidentified hypothetical agent who did not contract with Zillow,” the court documents say. “Based on this premise, plaintiffs further speculate that they must have paid more for their homes than if they had used agents who did not advertise with Zillow.”
“Plaintiffs do not cite any facts in support of these assumptions,” it added. “For example, plaintiffs do not allege that they even attempted to negotiate their agents’ commission rates, let alone any communications indicating that the agents rebuffed their efforts. Instead, they fatally allege that the buyer’s commission is paid by the seller and is predetermined before a buyer’s agent is even involved in the transaction.”
Regarding Zillow Home Loans, the portal said pre-approval letters are not “settlement services” under RESPA and noted that several claimants chose lenders other than ZHL.
“Only three other plaintiffs allege any contact with ZHL, and plaintiff Armstrong is the only one to have received a pre-approval letter and a mortgage loan from ZHL,” according to court documents. ‘Plaintiff Brucaliere’s agent suggested a ZHL loan, but she ‘declined because she wanted to use USAA.’ And Plaintiff Liao does not allege that his agent suggested or encouraged him to use ZHL, makes no allegations as to why he chose ZHL over other lenders, and used ZHL to finance a purchase on February 12, 2021, before agents allegedly began receiving incentives around ZHL’s pre-approval metrics “in or around 2022.”
Zillow also raised statute of limitations issues for six of the 11 plaintiffs and criticized the RICO count added in November, saying the plaintiffs failed to “make specific allegations regarding the use of email or telephone calls.”
“The allegations in this lawsuit are false and fundamentally characterize the way our company operates,” a Zillow spokesperson said Friday. “Zillow was built around providing consumers with information and choice, and our programs reflect that commitment.”
“Through trusted local agents, clear accountability and tools, we work with partners to help buyers understand what they can afford and deliver strong results for consumers, while ensuring they remain in control every step of the way,” she added. “We stand by our business model and will vigorously defend ourselves against these baseless allegations.”
The portal still has a new class action lawsuit filed in Washington District Court over Zillow Home Loans’ pre-approval quota for Premier Agents.
Read the full file below:
Email Marian McPherson
#Zillow #quash #Flexs #class #action #lawsuit