Plaintiffs in the Zillow class action lawsuit allege that eXp harmed buyers by promoting Zillow Flex and helping to ban the portal’s listings.
EXp Realty is currently engaged in a six-month legal battle against Zillow. In the lawsuit, a group of 12 homebuyers accused Zillow of violating state consumer rights, the Real Estate Settlement Procedures Act (RESPA), and the Racketeer Influenced and Corrupt Organizations Act (RICO).
The lawsuit, filed in Washington state, alleges that Zillow does not proactively educate homebuyers about its flex program. Under the Flex program, agents agree to pay a 40% referral fee on closed deals and meet Zillow Mortgage pre-approval quotas. According to court documents, both program terms resulted in higher costs for homebuyers due to higher fees and the loss of opportunities to secure more favorable mortgage terms.
The Real Brokerage and two other real estate teams, Nevada-based GK Properties and Florida-based Frano Team, were already listed as co-defendants, and now eXp has been added, posting a series of YouTube videos explaining how agents can increase their Flex conversion rates. The amended complaint also emphasizes that the brokerage supports Zillow’s listing access standards and notes that eXp Agent, listed as “RH,” represents plaintiff Alucard Taylor, who filed the complaint in September.
“Zillow Fraudulent Business Enterprise represents Zillow, Inc., Zillow Group, Inc., Zillow Homes, Inc., Zillow Listing Services, Inc., Zillow Home Loans, LLC, EXP Realty, LLC, GK Properties, Real Broker, LLC, Frano Team, and other persons and entities, including unknown third parties, who coordinated their actions to fraudulently induce home buyers to use Zillow Flex agents and unlawfully direct buyers to Zillow Home Loans, as alleged above.”
An eXp spokesperson said the company was “inappropriately named in this matter.”
“If we are drawn into this litigation, we intend to vigorously defend against these allegations, which we believe are completely without merit,” a spokesperson told Real Estate News Thursday.
Zillow filed a motion to dismiss for failure to state claims in February, saying the plaintiffs’ claims are based on a series of “irrelevant” events, including homebuyers believing they were connected to listing agents despite having tour agreements and buyer-broker agreements in place. The portal also said contact information for all listing agents is “readily available” on every listing page.
Regarding the latest application, the company said that without sufficient evidence, “it does not present anything new” and that it “puts a new legal theory up against a wall.”
“Zillow’s pending Motion to Dismiss alleges that Plaintiffs, despite all rewrites to amend and refine their claims, still fail to make a single valid claim against Zillow,” the company posted on its Front Porch blog. “This lawsuit and its allegations continue to add to the noise surrounding the facts.”
“Plaintiffs are unable to maintain a stable theory of who did what wrong, let alone a stable theory of who is the culprit,” they added. “…This new complaint still does not specify any consumer harm. Plaintiffs do not allege any facts showing that using Zillow’s connectivity tools or obtaining a free pre-approval letter actually increased the sale price of a home, increased loan costs for buyers, or produced a worse outcome than other options available.”
Please read the amended complaint below.
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