Lawsuit claims Zillow deceives consumers with agent programs

"The suit claims that when a consumer clicks the contact agent button on a listing on Zillow, they are directed to a Zillow-affiliated agent and not the listing agent of the property. It says that consumers are then directed to sign Zillow's Touring Agreement, which promises the buyer that the agent's services are free,' but this is deceptive and not true: if the sale goes through, the buyer's agent still receives a commission."

"Since the Flex agents only effectively receive a 1% commission from the purchase of a home (after paying the Hidden Zillow fees and commissions to their firms), they have no practical flexibility in negotiating a lower commission, the filing states. Sellers are stuck with paying 6% commission (or more) because the buyer Flex agent is receiving such a paltry sum in return, thereby increasing the purchase price of the home for the buyer."

When consumers click the contact agent button on Zillow listings, they are routed to Zillow-affiliated agents rather than the property's listing agent. Consumers are directed to sign Zillow's Touring Agreement, which promises that the agent's services are free even though the buyer's agent still receives a commission if a sale occurs. Zillow-affiliated Flex agents must pay Zillow up to 40% of their commission, a fee not disclosed to buyers or sellers. Flex agents' reduced effective commissions limit negotiation of lower rates, maintain high commission levels, and contribute to higher purchase prices for buyers.

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