Zillow Class Action Lawsuit Alleges Hidden Fees Inflate Home Prices

Case Overview: A class action lawsuit claims Zillow used hidden fees and deceptive practices that inflated commissions and home prices.

Consumers Affected: U.S. homebuyers who purchased through Zillow agents since September 2021.

Court: U.S. District Court for the Western District of Washington at Seattle

Real estate giant Zillow uses deceptive practices that drive up commissions and inflate home prices, a new lawsuit alleges. 

The lawsuit, filed by Oregon homebuyer Alucard Taylor, alleges that Zillow’s popular platform misleads consumers into working with its own agents while quietly pocketing undisclosed “hidden fees.”

Taylor argues that Zillow’s “Flex” program requires participating agents to pay the company up to 40% of their commission, costs that the lawsuit says are never disclosed to buyers or sellers. The complaint accuses Zillow of violating Washington State consumer protection laws, the federal Real Estate Settlement Procedures Act (RESPA), and unjust enrichment statutes.

Homebuyer Says Zillow Misled Buyers With “Contact Agent” Button

Taylor, who purchased a home in Portland in 2022, says he believed he was contacting the listing agent after clicking Zillow’s bright blue “Contact Agent” button. Instead, he was routed to a Zillow-affiliated agent who guided him through the purchase. 

He claims he didn’t feel he had any other option, and because of the hidden commission structure, his home’s price was higher than it otherwise might have been.

The lawsuit argues that this is not a single case. Listing agents report that as many as 80% of prospective buyers they encounter have already signed “Touring Agreements” with Zillow-affiliated agents. 

Those agreements promise “free” services, but in reality, commissions are baked into the deal, with sellers covering the costs and ultimately inflating home prices.

Lawsuit Claims Zillow’s Flex Program Conceals Steep Agent Fees

Zillow dominates online real estate, drawing twice the audience of its nearest competitors and commanding 66% of the U.S. market share. Its platform prominently features buttons inviting buyers to “Request a Tour” or “Contact Agent.” While these appear to connect buyers with listing agents, they actually route inquiries to Zillow’s own network of agents, the lawsuit explains.

For Flex agents, the costs are steep. Zillow takes up to 40% of their commission, on top of brokerage fees. Because these agents take home so little, the lawsuit claims, they have little incentive (or ability) to negotiate lower commissions, keeping total fees high and pushing up home prices.

The complaint also highlights policies that pressure sellers. Agents must post listings to Zillow within 24 hours of advertising a property elsewhere or risk being penalized. If they don’t comply, their ads may be banned, forcing sellers to fire them. 

According to the lawsuit, this tactic further entrenches Zillow’s dominance while limiting consumer choice.

Real Estate Giant Faces Growing Legal Scrutiny

This case is just the latest in a series of legal challenges facing Zillow. A Queens-based brokerage recently sued the company over its StreetEasy platform, claiming Zillow charged agents daily listing fees while suppressing or removing their ads. 

In 2023, Zillow paid $15 million to settle claims that it misled investors about a federal probe into a co-marketing program for lenders and agents. Other lawsuits have targeted everything from unsolicited marketing texts to alleged anti-competitive behavior.

In the Zillow hidden fees class action lawsuit, Taylor is seeking to represent anyone in the U.S. who purchased a Zillow-listed home through a Zillow agent since September 2021. The lawsuit demands damages under federal and state consumer protection laws, reimbursement of Zillow’s alleged ill-gotten profits, and injunctive relief to stop the practices.

Case Details

• Lawsuit: Taylor v. Zillow, Inc., et al.
• Case Number: 2:25-cv-01818
• Court: U.S. District Court for the Western District of Washington at Seattle

Plaintiffs' Attorneys

• Steve W. Berman and Jerrod C. Patterson (Hagens Berman Sobol Shapiro LLP)
• Douglas J. McNamara and Theodore J. Leopold (Cohen Milstein Sellers & Toll PLLC)

Have you ever purchased a home through Zillow’s platform? Did you notice higher fees or limited agent options? Share your experience below.