Nine days ago I covered the first class action accusing Zillow of steering buyers toward Zillow Home Loans in exchange for giving certain agents more and better leadsZillow Hit with Class Action Over Alleged Kickbacks to Agents…Is Your Agent Steering You?). That was serious enough.
Now the lawsuit has been amended, and the claims are much bigger. More plaintiffs were added. More real estate companies were named. And the accusations now include RICO violations, which is the same federal law used against large, organized schemes.
Before going further, here is the important reminder:
A lawsuit is only an allegation. Nothing is proven. The plaintiffs must still present evidence, the defendants will have their defense, and a judge or jury ultimately decides whether any of the claims are true.
With that said, here is what the amended filing says in simple terms.
What Changed in the New Filing
- RICO Allegations Added
- The suit now claims Zillow and several real estate teams operated as an organized enterprise to:
- Funnel buyers away from listing agents
- Push buyers toward Zillow Home Loans
- Hide large referral fees
- Keep commissions inflated
- RICO allows plaintiffs to claim a coordinated pattern of conduct rather than isolated events.
- New Buyers Added Nationwide
- Buyers from multiple states now say they thought they were contacting the listing agent but were routed to a Zillow partner agent instead. Many say they later learned the Zillow agent had strong incentives to push them toward Zillow Home Loans.
- Hidden Fee Accusations
- The lawsuit claims Zillow collects up to 40 percent of a buyer agent’s commission and that buyers and sellers are never told this. According to the filing, the fee is often kept off closing statements.
- Insider Testimony from Agents and Loan Officers
- The amended complaint includes accounts from people who say they were required to:
- Meet internal quotas for Zillow Home Loans referrals
- Use company-approved scripts
- Avoid recommending other lenders
- Sit through in person coaching from Zillow reps because certain things “could not be put in writing”
- Allow Zillow to monitor communications through required CRM software
- The amended complaint includes accounts from people who say they were required to:
- Impact on Consumers
- The lawsuit argues that these practices raise home prices because:
- Agents paying large referral fees have less flexibility to negotiate
- Commissions remain higher
- Buyers may be pushed into higher cost loan options
- The lawsuit argues that these practices raise home prices because:
How This Affects Buyers
If even part of these allegations are correct, it means some buyers may not be getting neutral advice. They may also be paying more for the home or their mortgage without realizing why.
- Buyers should always know:
- Who their agent actually represents
- What incentives that agent may have
- Whether a lender recommendation is truly in their best interest
How This Affects Agents
- For agents who rely on Zillow leads, the lawsuit highlights the importance of knowing:
- What expectations are placed on them
- How those expectations align with state fiduciary laws
- Whether steering buyers toward any specific lender puts them at risk
- Even when leads are valuable, agents are responsible for putting the client first.
Final Thoughts
- The amended lawsuit paints a much more detailed picture than the original filing, but again, these are only allegations. Zillow and the other defendants will respond, the court will review the facts, and nothing is decided until a judge or jury weighs the evidence.
- This case matters because it goes straight to trust in the home buying process. Buyers deserve transparency. Agents deserve clarity. And the industry deserves a fair and open marketplace where consumers come first.