Zillow prepares to face the music, real estate agents have had enough
Zillow has been in the headlines in recent months, but not exactly for his charitable work. Between patent trolling and the general steamroller of small real estate companies, the multibillion-dollar company is on its way to becoming a monopoly – and a few people have had enough, as evidenced by new lawsuits targeting Zillow.
A lawsuit, originating in Connecticut, comes both from and on behalf of real estate agents who are fed up with not being represented in Zillow’s agent results. The lawsuit claims that customers are redirected to agents who entered Zillow’s search results.
“A prohibitive majority of home buyers – 80% or more – use Zillow in the home search process,” the lawsuit explains. “This market dominance gives the Respondent the power to tilt the real world playing field in favor of its own privileged customers. They are Premier Agents.
As the lawsuit claims, Premier Agents are agents who pay fees to Zillow in order “to be associated with properties with which they do not have a listing relationship.” The lawsuit also alleges that the majority of people who use the website “are unaware that they are being directed to agents who paid Zillow a fee to make this happen.”
In other words, Zillow accepts payments from agents and, in turn, gives them priority over properties without giving users the option to opt out, which is illegal.
And, interestingly, a second real estate agency — Real Estate Exchange, or REX—Zillow sues for similar reasons, claiming that Zillow and Trulia exempt realtors who do not belong to the NAR from search results. The lawsuit alleges that while non-NAR agents can be found on both websites, their ads have been “relegated to a” hidden tab “” to pave the way for NAR agents.
The Connecticut lawsuit also describes in more detail the process that Zillow uses for its principal agents: “A potential buyer is attracted to the [Zillow’s] website with the stated purpose of making it easier to find a home to buy, but it is not obvious to the potential buyer that the defendant is more interested in putting that consumer in touch with a broker who has paid a fee to the respondent.
Meanwhile, REX’s lawsuit says Zillow “recently joined NAR-affiliated MLS and adopted their associative rules to cover up all non-MLS listings on Zillow’s high traffic websites.” This has led to the current complaint in which “non-MLS ads [are] accessible only through a recessed, obscured, and deceptive tab that consumers don’t see, and even professional realtors find deceptive.
Both lawsuits clearly focus on deceiving clients, failure to disclose this deception, abuse of MLS or clients’ trust in recommended real estate listings, and a general erosion of credibility on Zillow’s part. . They also allege, in summary, that Zillow did not give all listings and logged in real estate agents a fair hit in the process.
Zillow responded to REX’s lawsuit, saying the claims were “unfounded” and stating his intention to “vigorously defend against it”.
But if those lawsuits are successful, they could set a promising precedent for those looking to tackle Zillow’s irregularities.