A MESSAGE FROM LIBERTAS GROUP

Harris Real Estate Daily

By Tim & Julie Harris · September 23, 2025

🌘 Good evening, agents! A new class-action lawsuit filed in federal court is putting Zillow back under the microscope and this time the focus is on its “Flex agent” program.

The case could have major implications for how online platforms handle leads, commissions, and agent representation.

Source: RISMedia, Sept. 19, 2025

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1. 🚨 Allegations Against Zillow

• Consumer deception: Buyers clicking “Contact Agent” are routed to a Zillow-approved Flex agent, not the listing agent. Most buyers assume they’re reaching the professional who actually represents the property.

• Hidden referral fees: Flex agents must pay Zillow up to 40% of their commission. These fees are never disclosed to the consumer.

• Conflict of interest: When agents owe nearly half their commission back to Zillow, regulators may see it as undermining fiduciary duty to clients.

• Market dominance: With two-thirds of all online real estate traffic, Zillow has the power to enforce restrictive rules on listings and agent behavior.

If the courts agree these are hidden kickbacks, the fallout could reshape how agents generate business online.

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2. 🏠 Listing Agents’ Long-Standing Grievance

For years, listing agents have argued that Zillow “steals” their work product — MLS listings they create and pay for, only to repackage them in ways that benefit Flex agents.

• A consumer sees a property, clicks “Request a Tour,” and is connected to a Flex agent who appears to represent the listing.

• In reality, the actual listing agent, the one who invested in securing and marketing the property — is sidelined.

• This blurs the line between who represents the seller, and who is simply paying Zillow for buyer access.

This practice has fueled the belief among listing agents that Zillow intentionally fosters consumer confusion to generate revenue at their expense.

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3. ⚖️ Legal Risks at a Glance

• RESPA: Prohibits undisclosed referral fees and kickbacks.

• Consumer protection laws: Ban deceptive or unfair business practices.

• Antitrust: Prevents dominant platforms from abusing market power.

If courts find Zillow’s Flex model violates these rules, the decision could force greater transparency across the entire industry.

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4. 💡 What Brokers and Agents Should Do Now

• Be transparent: Always disclose how clients find you and what fees are involved.

• Don’t depend on one platform: Build your own lead sources through prospecting, referrals, and local marketing.

• Protect your listings: Educate your sellers about how third-party platforms may present their property online.

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✨ The Bottom Line

This lawsuit isn’t just about Zillow. It’s about consumer trust and whether platforms can profit by confusing the public about who represents whom in a transaction.

Agents who generate their own business, maintain transparency, and put clients first will be best positioned — no matter what happens next in court.

Source: RISMedia, Sept. 19, 2025

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