# Zillow Faces New Class-Action Lawsuit Alleging Inflated Homebuying Costs
The law firms that filed one of the original class-action lawsuits challenging real estate commissions nationwide have a new target: Zillow.
In a draft complaint shared exclusively with Real estate News, attorneys from Hagens Berman and Cohen Milstein allege the home search giant inflated costs for homebuyers through its Zillow Flex referral program, which charges agents up to 40% for a triumphant transaction. The suit claims Zillow’s referrals to agents, which garnered more than $2 billion in revenue last year, illegally maintain “high and inflexible commissions.”
“We believe Zillow is well aware of the potential for ill-gotten gains in this space and has sought to play fast and loose when real people’s basic need of housing is on the table,” saeid Steve Berman, Hagens Berman’s founder and managing partner, in a statement.
“A company with its footprint is not too big to be held accountable, and we intend to support homebuyers who have been harmed.”
‘Tricks’ and a lack of disclosure: The Sept. 19 complaint, filed in the U.S. District Court for the western District of Washington, alleges Zillow is a “monopoly” in the U.S. market for residential real estate online search services, stating that it claims 66% of the U.S. real estate audience share.
“Zillow’s ability to monetize this dominance is based on deceptive and illegal conduct,” the complaint says.
“When potential buyers are on Zillow’s website, Zillow tricks them into signing up with a Zillow agent. If the agent is part of Zillow’s ‘Flex’ program, Zillow gets 40% of the agent’s commission – a payment on the back end that is undisclosed to all parties involved” – including the buyer and seller who might want to know that information as they negotiate the sale and close of the listing.
Buyer claims he didn’t have ‘any other option’: The plaintiff, Alucard Taylor, is a resident of Portland,