Zillow in Fresh Lawsuit Headache as Plaintiffs Target Flex

Zillow will face an additional legal fight imminently after plaintiffs filed a lawsuit against the portal for deceptive fee structures surrounding its Flex product.

The suit was filed by Alucard Taylor, who purchased a home in Portland, Oregon, in 2022 using a Zillow-affiliated agent. Attorneys from antitrust firms Hagens Berman and Cohen Milstein will represent Taylor, asserting that homebuyers paid inflated costs, hidden fees and anticompetitive practices.

The plaintiffs are seeking billions of dollars in damages for homebuyers who used Flex, perhaps unknowingly, since 2021.

The lawsuit also argues that Zillow has unjustly profited from breaches of the Real Estate Settlement Procedures Act (RESPA), which prohibits unearned fees for all real estate brokers, as well as buyer and seller agents.

The plaintiffs are seeking a trial and an injunction against Zillow profiting from its Flex program.

According to the press release shared by the plaintiff firm Hagens Berman, Zillow "further ensures market dominance by tricking potential homebuyers into signing up with a Zillow agent, thereby earning Zillow commission on the sale of the home."

Zillow Flex can impose up to a 40% charge for agents who close a transaction if they received a lead via Flex. The lawsuit alleges that Flex instigates a hidden fee structure that regularly sees agents pass off this extra cost to their clients, who are possibly uninformed about whether an agent used Flex as part of their becoming the buyer's agent.

Zillow is the undisputed market leader in online real estatw listings... twice as high as its nearest competitors. It promotes the fact that 80% of consumers come to Zillow directly. Zillow's ability to monetize this dominance is based on deceptive and illegal conduct.

[The 40% cut] of the commission paid to Zillow, for no services rendered related to the real estate sale, is never disclosed to the buyer or seller.

Zillow’s scheme has the intent and the effect of unlawfully maintaining high and inflexible commissions that drive up the prices that buyers must pay.

The complaint also says that, if buyers were more regularly directed towards agents who hadn't paid for visibility via Zillow, "they would be better positioned to negotiate a lower purchase price, because the seller would not have to pay commissions to the seller’s agent and the buyer’s agent."

Steve Berman, founder and managing partner at Hagens Berman, said:

"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.

"Zillow didn’t get to its place of market dominance by presenting a better option or by winning over the hearts of the public, but through what we believe to be deceptive and illegal conduct carefully designed to stifle competition at the expense of its own customers."

Zillow recorded revenue increases of 14.1% in its latest financial filings in August 2025.

Zillow's legal team is already busy following a potentially "billion-dollar" lawsuit brought by CoStar Group in July, while Compass has also sued Zillow for anti-competitive practices regarding its controversial listings ban announced earlier this year.