In a motion to dismiss, Zillow argued that the plaintiffs failed to provide evidence of consumer deception, inflated fees, or that Flex agents coerced buyers into obtaining Zillow mortgages.
Zillow has filed a motion to dismiss a class action lawsuit alleging that its Zillow Flex and Zillow Home Loans programs violate state and federal consumer protection laws.
“In a complaint filed Feb. 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 do not meet the legal standards necessary to move forward,” the company said in a blog post. “This is the fourth iteration of Plaintiffs’ complaint. Zillow’s complaint alleges that even after Plaintiffs have completely rewritten their claims to revise and refine their claims, they still do not sufficiently assert a single claim against Zillow.”
The first complaint, filed in September 2025, focused on the portal’s Flex referral program. The plaintiffs alleged that Zillow did not proactively educate consumers about the referral process, which involved matching buyers with Flex agents who paid a 40 percent referral fee. The fees are paid to consumers through high fees, in violation of the Washington Consumer Protection Act, they said.
The complaint was expanded to include Zillow Home Loans in November, with the plaintiffs alleging that the portal forces Flex members to push mortgage products on homebuyers, a violation of the Real Estate Settlement Procedures Act (RESPA). It also added a racketeer Influenced and Corrupt Organizations Act (RICO) count to account for intermediary participation in Zillow’s alleged scheme to drive up consumer costs.
But Zillow said the class action complaint is based on a series of “nonsensical” events, including homebuyers believing they were connected to listing agents despite having tour agreements and buyer brokerage agreements in place. Additionally, if a homebuyer wishes to contact a listing agent, the information will be “readily available” on each property page, the portal says. Regarding the alleged inflated fees, Zillow said it is purely hypothetical.
“Plaintiffs surmise that because the agent paid a portion of his fees to Zillow, the agent must have commanded a higher commission rate than an unidentified fictitious agent who is not contracted with Zillow,” court documents state. “Based on this assumption, Plaintiffs further infer that they must have paid more for the home than they would have had they used an agent who did not advertise on Zillow.”
“Plaintiffs do not cite any facts to support these assumptions,” it added. “For example, Plaintiffs do not allege that they even attempted to negotiate the agent’s commission rate, let alone any correspondence indicating that the agent refused to negotiate. Instead, they fatally allege that the buyer’s commission is paid by the seller and is predetermined before the buyer’s agent becomes involved in the transaction.”
Regarding Zillow Home Loans, the portal said pre-approval letters are not “payment services” under RESPA and noted that several plaintiffs chose lenders other than ZHL.
“Only three other plaintiffs claim to have had 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 state. “Plaintiff Bourcarrière’s attorney offered her a ZHL loan, but she declined because she wanted to use USAA.” And Plaintiff Liao does not allege that the agent suggested or encouraged him to use ZHL, does not allege why he chose ZHL over other lenders, and that the agent used ZHL to finance the purchase on February 12, 2021, before the agent allegedly began receiving incentives based on ZHL’s pre-approval metrics “around 2022.” ”
Zillow also raised statute of limitations issues for six of the 11 plaintiffs, rebutting the RICO count added in November, saying the plaintiffs failed to file “specific allegations regarding the use of mail or wire.”
“The allegations in this lawsuit are false and fundamentally mischaracterize our business operations,” a Zillow spokesperson said Friday. “Zillow is built around giving consumers information and choice, and our programs reflect that commitment.”
“Through trusted local representation, clear accountability and tools, we work with our partners to help shoppers understand what they can afford and deliver strong outcomes for consumers, while ensuring they are in control every step of the way,” they added. “We stand by our business model and will vigorously defend against these baseless allegations.”
The portal has filed a separate class action lawsuit in Washington District Court over Zillow Home Loans’ pre-approval slots for Premier Agents.
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