Zillow, the largest U.S. online real estate marketplace, is facing a proposed class action lawsuit in Seattle. The case, filed on September 22, 2025, alleges that Zillow deceived homebuyers by steering them toward its network of partner agents instead of the listing agents responsible for the property.
If certified, the lawsuit could cover tens of thousands of buyers who have used Zillow-affiliated agents since 2021.
The allegations against Zillow
The plaintiff, an Oregon resident, contends that Zillow’s platform violates both Washington state consumer protection law and federal real estate law. According to the complaint, the company allegedly takes as much as 40% of commissions from certain affiliated agents without disclosing this arrangement to buyers or sellers.
By keeping these cuts hidden, the lawsuit claims, Zillow creates incentives for agents to prioritise their own earnings rather than the interests of clients. Lawyers argue that this model helps maintain high and inflexible commission rates, which in turn drives up costs for homebuyers.
Zillow’s response
Zillow has rejected the claims, calling them a “fundamental misrepresentation” of its operations. The company maintains that it supports buyers’ and sellers’ freedom to choose their agents.
Despite ongoing lawsuits, Zillow remains a dominant force, reporting 227 million unique visitors monthly and 2.4 billion visits in Q1 2025.
Zillow’s broader legal landscape
This is not Zillow’s first high-profile legal challenge:
- Compass lawsuit (2025): Accused Zillow of restricting competition around exclusive listings.
- CoStar lawsuit (2025): Alleged massive copyright violations linked to listing data.
Source: Reuters
