Key Details:
- Hagens Berman filed a federal class-action lawsuit against Zillow on Sept. 19, 2025, alleging deceptive practices that inflated homebuyer costs.
- The complaint cites Zillow’s 66% market share, $2B in referral revenue, and Flex agents paying up to 40% of their commissions, costs that drive up home prices.
A fresh wave of commission litigation has landed on Zillow’s doorstep.
On September 19, 2025, homebuyer Alucard Taylor filed a class-action lawsuit in U.S. District Court for the Western District of Washington, accusing the portal of using deceptive practices to inflate home purchase costs.
The case is led by Hagens Berman and Cohen Milstein, the same firms behind the landmark Moehrl commission lawsuit that ended in more than $1 billion in settlements.
Zillow is already in the legal spotlight with CoStar’s lawsuit for copyright infringement, as well as Compass’s legal challenge to Zillow’s new Listing Access Standards.
Here’s what we know so far.
Allegations Against Zillow’s Flex Program
At the center of the lawsuit is Zillow’s Flex referral program. According to the complaint, agents who participate in Flex must pay Zillow up to 40% of their commission on a closed transaction.
The lawsuit alleges this hidden fee is never disclosed to buyers or sellers, even though it ultimately increases the cost of a home purchase.
In addition, the complaint claims that when prospective buyers click the bright blue “Contact Agent” button on Zillow, they believe they are reaching out to the listing agent. Instead, they are routed to a Zillow-affiliated buyer’s agent.
The lawsuit also points to similar issues with Zillow’s “Request a Tour” feature.
From the filing:
“Zillow tricks them into signing up with a Zillow agent. If the agent is part of Zillow’s ‘Flex’ program, Zillow gets 40% of the agent’s commission, a payment on the back end that is undisclosed to all parties involved.”
Attorneys argue that this design misleads consumers while also incentivizing agents to prioritize their commissions above buyer interests.
According to the complaint, some Flex agents end up with an effective 1% commission after paying Zillow’s cut and brokerage fees, leaving little room to negotiate on behalf of buyers.
Impact on Buyers and Sellers
The plaintiff, Taylor, said he did not feel he had any other option but to use the agent he was connected with through Zillow.
The lawsuit claims this lack of choice leaves buyers disadvantaged in negotiations. If they were connected directly with listing agents, they might be able to secure lower prices because sellers would not be responsible for paying two sets of commissions.
The complaint also says the program locks sellers into paying 6% or more in commissions, driving up overall home prices.
Listing Standards Under Fire
Beyond Flex, the lawsuit also challenges Zillow’s Listing Access Standards, a policy requiring any property marketed to the public to be posted on Zillow within 24 hours.
Agents who fail to comply risk warnings and eventual bans. The filing states that sellers banned from Zillow could have their listings reinstated if they chose to work with a Zillow-affiliated agent.
Attorneys argue this rule is part of a broader scheme to inflate profits and reinforce Zillow’s market dominance. The company currently holds an estimated 66% of the U.S. real estate audience share, with 80% of consumers going directly to its platform.
Monopoly and Market Power
The lawsuit says Zillow’s market power constitutes a monopoly in online real estate search.
Attorneys cite Zillow’s own investor presentations showing its audience share is double that of its nearest competitor.
According to Inman, the filing also claims Flex buyer agents “insert themselves into the transaction between the buyer and the listing agent to extract a buyer agent commission.”
Steve Berman, founder of Hagens Berman, said in a statement:
“Real estate is a unique marketplace where hundreds of thousands of dollars are routinely at play. We believe 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. A company with its footprint is not too big to be held accountable, and we intend to support homebuyers who have been harmed.”
Legal Claims and Relief Sought
The complaint alleges violations of the Washington Consumer Protection Act and the federal Real Estate Settlement Procedures Act (RESPA). It seeks class-action status for buyers nationwide who used a Zillow-affiliated agent in the past four years.
Plaintiffs are requesting a jury trial, treble damages, disgorgement of profits, and injunctive relief to stop the practices in question.
In response, a Zillow spokesperson told HousingWire the company will “vigorously defend” itself:
“This complaint fundamentally misrepresents how Zillow operates and the value we’ve delivered to buyers, sellers and real estate professionals for nearly two decades.
“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.”
The lawsuit arrives at a time when the industry is still adjusting to new commission rules and ongoing litigation fallout. Stay tuned for more as the story develops.
