As the real estate world continues to adjust to harsh market conditions and frustrating new compensation rules, Zillow is under the microscope like never before.
Here's a look at current industry lawsuits involving Zillow:
HOMEBUYERS (CLASS ACTION) VS ZILLOW: A class-action lawsuit filed in September by the same attorneys who upended real estate compensation practices in 2023. This case alleges that Zillow deceptively inflates homebuyer costs by charging referral fees of up to 40% for leads generated through its various platforms. The case seeks class-action status for anyone who used a Zillow-referred agent to purchase a home in the past four years.
CO-STAR VS ZILLOW: Co-Star is the parent company of Apartments.com and Homes.com, and in this suit Co-Star claims that Zillow has effectively stolen more than 47,000 listing photos from its websites without compensation or permission.
FEDERAL TRADE COMMISSION VS ZILLOW: The FTC has filed suit against Zillow for "unfair trade practices" based on a recent $100M marketing agreement between Zillow and Redfin which gives Zillow exclusive access to Redfin's network of rental listings. This is all part of a larger "private networks" debate as industry players look to build exclusive channels with exclusive access to certain listings and property types.
Why so much Zillow chaos?
Zillow generates more than $2 billion in revenue each year by monetizing listing data it does not own. Both nationally and locally, transaction counts are down dramatically as buyers are priced out by high rates and sellers simply stay in homes that no longer meet their needs because of 3% mortgages.
Housing has become an incredibly inefficient market thanks to the Fed's boneheaded zero-interest rate policies of 2020-22.
The pie is no longer big enough to feed all the mouths, and so Zillow has become a top target in a multi-front war with brokerages, consumers and the FTC as it tries to remain relevant in a rapidly recalibrating world.
