Zillow faces new claims over 'fraudulent' practices
Amended lawsuit replaces initial filing
By: Maddle McGay
NorthJersey.com
USA Today Network - New Jersey
..... An expanded lawsuit filed against Zillow brings a new set of accusations over alleged "fraudulent" business practices, containing testimony from a dozen anonymous current and former Zillow-affiliated agents and loan officers.
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The amended class-action complaint, filed on November 19 [2025] in Seattle federal court, replaces the initial September[2025] filing.
..... Both allege that Zillow tricks buyers into working with Zillow-affiliated agents and conceals large referral fees, adding that agents are "incentivized to 'burn and churn; through clients" in order to make more commission.
..... It now names 10 plaintiffs across 10 states, and it adds several defendants, including Zilllow Home Loans and three real estate brokerages: Works Industries LLC in Oregon, GK Properties in Nevada and The Frano Team in Florida.
..... The new filing also says Zillow uses internal incentives to encourage affiliated agents to steer home-buyers to use its own mortgage business and to select only the most qualified borrowers to hide the inexperience of loan officers.
..... "Zillow's practices and policies in the real estate industry are not simply indifferent to the agents' duties to protect their clients' interests; Zillow actively schemes to subvert them," the lawsuit says. "Zillow's goal is simple: to monetize every step of the home buying process - even if illegally - and to encourage, incentivize and ultimately coerce agents into violating their fiduciary duties by disregarding their client's interest."
..... Other alleged practices outlined in the amended lawsuit, provided by the 12 anonymous witnesses, include:
* Using in-person visits to real estate offices to instruct affiliate agents on Zillow Home Loan quatoas to avoid leaving a paper trail.
* Misrepresenting or omitting closing-cost information, leading to either excessive costs or failed transactions.
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Promoting Zillow-affiliated agents as a "top Agent" based on their participation in the program, despite a lack of knowledge about the real estate process of the neighborhoods where they work.
* Requiring affiliated agents to use :follow-Up Boss," which allows Zillow to monitor miscommunications and identify when agents are recommending other mortgage lenders.
..... There are also claims that Zillow and several brokerage partners coordinated to direct buyers to Zillow-afilliated agents and to steer them into using Zillow Home Loans.
..... The filing also cites remarks from real estate commentator and podcaster Jared James, which were posted to YouTube on September 29. [2025]
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"My DMs, guys have been flooded and they're flooded by team leaders and agents who are Zillow Flex Teams who basically say, 'Yeah, 100% true and worse than you think it is," he said, according to the lawsuit. "And every single one of them says, 'Don't mention my name. Anonymous. do not mention my name.' but it's 100% happening."
..... The lawsuit says Zillow's business practices are a violation of the Racketeer Influenced and corrupt Organization Act, the Real estate Settlement Procedures Ace and the Washington Consumer Protection Act, and that the company unjustly benefited at the expense of consumers.
..... "Buying a home is typically the largest and most complex financial decision someone makes in their lifetime," said Steve Berman, managing partner and co-founder of Hagens Berman, who field the lawsuit. "Zillow has sought to take advantage of home-buyers, in a manner that is, in our view, illegal."
..... This is one of six major lawsuits that Zillow has faced in the second half of 2025. the most recent was field on November 7, [2025] citing allegedly unethical practices that steer consumers towards its mortgage products.