A class action lawsuit filed in September is taking aim at Zillow, with 10 homebuyers, including a Norwalk, Connecticut resident claiming the online real estate platform used deceptive practices during the homebuying process. The plaintiffs allege that when buyers clicked Zillow’s “contact agent” button, believing they were reaching out to a home’s listing agent, they were instead routed to a Zillow-affiliated buyer’s agent without clear disclosure or informed consent. The lawsuit is being led by the law firm Hagens Berman Sobol Shapiro, which says Zillow effectively inserted itself into transactions in order to collect fees at multiple stages.
According to the complaint, Zillow’s referral system may create conflicts of interest for agents, some of whom are required to give up as much as 40% of their commission to the company. The lawsuit claims this pressure can incentivize agents to push buyers to offer more for homes, potentially putting commissions ahead of clients’ best interests. Attorney Ash Klann noted that, from the Connecticut plaintiff’s perspective, Zillow’s website was misleading in several ways, limiting consumers’ ability to make fully informed choices. After the lawsuit was filed, 12 current and former Zillow agents and loan officers came forward to support the claims, strengthening the case, according to Steve Berman, managing partner and co-founder of Hagens Berman.
The lawsuit also alleges Zillow steered buyers toward Zillow Home Loans, allowing the company to profit from both representation and financing. Plaintiffs are seeking monetary damages and potential changes to Zillow’s policies. Zillow did not respond to a request for comment. Homebuyers who used a Zillow agent or Zillow Home Loans beginning in 2019 may be eligible to join the class action as the case moves forward.
This blog is intended to provide information to the general public and to practitioners about developments that may impact Oregon class actions.
