Zillow moves to quash Flex class-action lawsuit

In the motion to dismiss, Zillow claimed the plaintiffs failed to provide proof of consumer deception, inflated commission costs or that Flex agents forced buyers to get Zillow Home Loans.

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Zillow has filed a motion to dismiss a class-action lawsuit that claims its Zillow Flex and Zillow Home Loans programs violate state and federal consumer protection laws.

“In a motion filed February 20 in the U.S. District Court for the Western District of Washington, Zillow argues that, despite the plaintiffs’ latest 100‑page complaint, their claims lack substance and fall short of the legal standards required to move forward,” the company said in a blog post. “This is the Plaintiffs’ fourth iteration of their complaint. Zillow’s motion argues that, even after all of plaintiffs’ rewrites to amend and refine their claims, they still do not sufficiently plead a single claim against Zillow.”

The initial complaint, which was filed in September 2025, focused on the portal’s Flex referral program. The plaintiffs claimed Zillow wasn’t forthcoming with consumers about the referral process, which includes connecting buyers with Flex agents, who pay a 40 percent referral fee. That fee, they said, is passed down to consumers through inflated commissions, in violation of the Washington Consumer Protection Act.

The complaint was expanded in November to include Zillow Home Loans, with plaintiffs alleging that the portal forces Flex members to push its mortgage product on homebuyers, which would violate the Real Estate Settlement Procedures Act (RESPA). They also added a Racketeer Influenced and Corrupt Organizations Act (RICO) count to account for brokerages’ participation in Zillow’s alleged scheme to inflate consumer costs.

However, Zillow said the class-action complaint is based on a “nonsensical” chain of events, including homebuyers believing they’re being connected with the listing agent, despite having signed a touring agreement and a buyer broker agreement. And if a homebuyer wanted to contact the listing agent, the portal said that information is “readily available” on each listing page. When it comes to allegedly inflated commissions, Zillow said that’s purely hypothetical.

“Plaintiffs speculate that, because their agents paid a portion of their commission to Zillow, the agents must have demanded a higher commission rate than an unidentified hypothetical agent who did not contract with Zillow,” the court documents read. “Based on this assumption, Plaintiffs further speculate that they must have paid more for their homes than if they had used agents who did not advertise with Zillow.”

“Plaintiffs do not cite a single fact in support of any of these assumptions,” it added. “For example, Plaintiffs do not allege that they even attempted to negotiate their agents’ commission rates, let alone any communications showing that the agents rebuffed their efforts. Instead, they fatally allege that the buyer’s commission is paid by the seller and pre-determined before a buyer’s agent is even involved in the transaction.”

Regarding Zillow Home Loans, the portal said pre-approval letters aren’t “settlement services” under RESPA and noted that several plaintiffs chose lenders other than ZHL.

“Only three other Plaintiffs allege any contact with ZHL, and Plaintiff Armstrong is the only one who obtained a pre-approval letter and a mortgage loan from ZHL,” court documents read. “Plaintiff Brucaliere’s agent suggested a ZHL loan, but she ‘declined because she wanted to use USAA.’ And Plaintiff Liao does not allege his agent suggested or encouraged him to use ZHL, makes no allegations as to why he chose ZHL over other lenders, and used ZHL to finance a purchase on February 12, 2021, before agents allegedly began receiving incentives around ZHL pre-approval metrics ‘in or around 2022.'”

Zillow also raised statute-of-limitations issues for six of the 11 plaintiffs and bit back at the RICO count added in November, saying the plaintiffs failed to provide “specific allegations regarding use of mails or wires.”

“The claims in this lawsuit are false and fundamentally mischaracterize how our business operates,” a Zillow spokesperson said on Friday. “Zillow is built around empowering consumers with information and choice, and our programs reflect that commitment.”

“Through trusted local agents, clear accountability and tools, we work with partners to help buyers understand what they can afford and deliver strong outcomes for consumers while ensuring they remain in control at every step,” they added. “We stand by our business model, and we will vigorously defend against these meritless allegations.”

The portal still has another class-action lawsuit filed in the Washington District Court over Zillow Home Loans’ pre-approval quotas for Premier Agents.

Read the full filing below:

Email Marian McPherson

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