A class-action lawsuit filed in U.S. District Court in Seattle on November 19 alleges that Zillow has engaged in “anticompetitive” and “predatory” practices that have driven up home prices across the United States. The lawsuit claims Zillow manipulates the home buying process, steering buyers toward Zillow Flex agents through its website, often without buyers’ knowledge of the underlying relationships and financial arrangements. According to the suit, up to 40 percent of the agent’s commission is paid to Zillow through a backend deal, a fact not disclosed to buyers or sellers.
Plaintiffs include a Henderson, Nevada resident and a California resident who recently purchased a home in Las Vegas. The lawsuit names one of the largest brokerages in the Las Vegas Valley, GK Properties (which recently merged with Signature Real Estate Group), as a defendant. Las Vegas Realtors President George Kypreos, a Zillow Flex agent, is also involved, though he declined to comment.
The suit, brought by Seattle-based law firm Hagens Berman, alleges violations of the Racketeer Influenced and Corrupt Organizations (RICO) Act, claiming that Zillow and certain brokerages colluded in deceptive practices. The complaint cites testimony from a dozen current and former loan officers who corroborate the allegations, describing Zillow’s “burn and churn” approach to client relationships.
Central to the lawsuit are claims that Zillow’s tactics—such as steering buyers to its own affiliated agents and mortgage services—limit consumer choice, keep buyers and sellers uninformed, and inflate home prices. The lawsuit argues that if buyers were allowed to negotiate directly with sellers’ agents, purchase prices could be lower because commissions would not be split between multiple agents.
The case draws parallels to a recent $418 million settlement in Missouri involving the National Association of Realtors over similar broker practices. Plaintiffs seek a jury trial and allege that Zillow’s practices prioritize company profits and agent commissions at the expense of transparency and fair competition in the real estate market. Zillow declined to comment on the ongoing litigation.
