New lawsuit claims Zillow tied access to its Premier Agent and Flex leads to referrals for Zillow Home Loans, in violation of state and federal laws.
Zillow is facing a class-action lawsuit that claims the company used its powerful lead generation programs to steer homebuyers toward its own mortgage business — and rewarded agents who went along.
The complaint, filed Nov. 7 in federal court in Seattle, alleges that Zillow violated federal and state consumer protection laws by creating a system of “kickbacks” and incentives for agents, linking Zillow Home Loans referrals to leads.
Specifically, the lawsuit claims Zillow’s actions violate the Real Estate Settlement Procedures Act (RESPA), the Washington Consumer Protection Act, as well as aiding and abetting breaches of fiduciary duty by real estate agents.
A closer look at the allegations: Zillow is accused of pressuring agents in its Premier Agent and Flex programs to steer buyers to Zillow Home Loans for pre-approval. Agents who sent more clients to Zillow’s mortgage arm were rewarded with extra or higher-quality leads, while those who didn’t could lose access to the lucrative Flex program, the filing claims.
Buyers, meanwhile, were allegedly steered toward Zillow Home Loans without realizing their agent’s business depended on it. The complaint states that “Zillow’s system harms consumers, who are robbed of the disinterested advice of their fiduciary real estate agent, and instead are unknowingly steered towards ZHL’s limited and often uncompetitive mortgage products.”
The filing connects the alleged conduct to Zillow’s broader growth strategy, citing its February 2025 investor materials that describe a “housing super app” designed to “capture every stage of the home-buying journey on a single platform.”
It’s not the first time Zillow has been accused of RESPA violations. In 2023, the company settled a class-action suit related to its mortgage co-marketing program, which predated Zillow Home Loans and was allegedly under investigation by the Consumer Financial Protection Bureau. Zillow maintained it did nothing wrong, and the CFPB concluded its investigation without pursuing enforcement action.
Real Estate News has reached out to Zillow and will update this story with their response.
Who’s behind the lawsuit: Plaintiff Araba Armstrong, a first-time buyer from Anchorage, Alaska, says she was connected with an agent through Zillow’s platform and, “at that agent’s direction, obtained mortgage pre-approval and subsequently a mortgage loan from Zillow Home Loans.” The complaint adds that she “was not informed of Zillow’s quotas, incentives, or requirements linking the agent’s access to Zillow leads to referrals or pre-approvals with ZHL.”
The case was filed by Tousley Brain Stephens PLLC, a Seattle-based class-action firm, and DiCello Levitt LLP, a consumer-focused firm with offices in Chicago and New York. They are seeking class certification on behalf of “all persons in the United States who were referred to Zillow Home Loans by a Participating Agent, and obtained a mortgage loan from Zillow Home Loans in connection with the purchase of residential property.”
Echoes of another recent class action: Hagens Berman and Cohen Milstein, the same law firms behind the landmark commission lawsuits against major brokerages and the National Association of Realtors, called out Zillow’s Flex program in a suit filed in September — but for different reasons.
That case accuses Zillow of inflating homebuying costs through Flex, which charges partner agents up to 40% of their commission and allegedly keeps overall commissions “high and inflexible.” Zillow disputes the allegations, saying the complaint “fundamentally misrepresents how Zillow operates” and pledging to “vigorously defend” its business practices.
