A federal class-action lawsuit filed September 19, 2025, claims Zillow uses its dominant position in online real estate to mislead home buyers and conceal referral-based payments. The complaint states that Zillow “tricks [buyers] into signing up with a Zillow agent,” describing a system that hides Zillow’s involvement behind user-friendly website buttons and misleads consumers into thinking they are contacting the listing agent.
The lawsuit states: “Zillow’s website has a big button in bright blue lettering posted next to the house listing that says ‘Contact Agent’… Buyers, however, naturally believe they are contacting the listing agent. Instead, they are routed to a Zillow-affiliated buyer’s agent.” It continues, “Zillow designs its website to trick potential buyers into connecting with a Zillow-affiliated agent instead of the seller’s agent.”
Once a consumer clicks the button, “Zillow farms out these leads to Zillow-affiliated agents who are part of the Zillow Flex program.” Those agents then “arrange a tour of the home by getting the buyer to sign a ‘Touring Agreement.’ The ‘Touring Agreement’ 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.” If that agent is a Zillow Flex agent, “he or she has to pay Zillow up to 40% of the agent’s commission,” a charge described as “Hidden Zillow Fees,” which are “never disclosed to the buyer or the seller”.
While the Touring Agreement is introduced early in the process, it’s important to note that the local agent, the one actually working with the buyer, may, and often does, go on to explain representation, buyer agency agreements, and compensation clearly and transparently. The lawsuit does not claim that local agents are misleading consumers. Its allegations are directed specifically at how Zillow’s platform is structured and presented, not at the behavior of the agents receiving leads.
The suit further alleges that Zillow exercises strict control over agents in its Flex program: “Zillow Flex agents are also required to steer buyers to Zillow Home Loans; if the agents fail to meet certain quotas, they are dropped from the program.”
According to the lawsuit, “Zillow’s scheme has the intent and the effect of unlawfully maintaining high and inflexible commissions that drive up the prices that buyers must pay.”
Referral fees, such as those paid in the Flex program, are a common part of the real estate industry. Agents frequently pay similar fees to relocation companies or out-of-market brokerages when working with referred clients. Disclosure of referral fees to consumers is not required under RESPA or Missouri/Illinois real estate license law, and is not standard industry practice. The lawsuit does not take issue with referral fees themselves, but rather with the way Zillow’s platform allegedly misleads consumers into thinking they are contacting the listing agent and not disclosing the corporate connection or fee structure.
If you’re looking for a home in St. Louis or considering selling one, it’s worth remembering that **you have local options. The official St Louis Real Estate Search site includes all listings from MARIS, the same data Zillow uses, but is operated by local real estate professionals at MORE, REALTORS®. You can also check your home’s estimated value using the free Home Valuation Tool based on real-time market conditions.
The full lawsuit is included below for those who want to read the complete filing.
