Kopa Real Estate Blog

Zillow is currently facing a class-action lawsuit alleging it operates an illegal kickback scheme by coercing its affiliated real estate agents to steer homebuyers toward Zillow Home Loans (ZHL) in exchange for valuable customer leads. The lawsuit claims this practice violates federal and state laws and harms consumers by denying them impartial advice. 

Allegations of the Lawsuit

The class-action complaint, initially filed in November 2025 and expanded with insider information from 12 current and former Zillow employees, makes several serious claims: 

• Illegal Kickbacks/Steering: The central allegation is that Zillow rewards agents in its "Premier Agent" and "Flex" programs with high-quality leads only if they meet quotas for referring clients to ZHL for pre-approval or a mortgage. This alleged arrangement is considered a "thing of value" exchanged for referrals, which violates the Real Estate Settlement Procedures Act (RESPA).
• Breach of Fiduciary Duty: The lawsuit argues that Zillow's system incentivizes agents to prioritize Zillow's financial goals over their clients' best interests and impartial advice. Consumers are often unaware that their agent's access to future business depends on which lender they use.
• Deceptive Practices: Zillow allegedly uses an internal tool called "Follow-Up Boss" to monitor communications between agents and buyers, attempting to catch agents who recommend competing lenders. In-person meetings were allegedly used to instruct agents on quotas to avoid a paper trail.
• Harm to Consumers: The lawsuit claims that this steering forces buyers into using ZHL's potentially less competitive or more costly loan products, resulting in higher fees or inflated interest rates compared to other lenders.
• RICO Claims: An amended complaint added claims under the Racketeer Influenced and Corrupt Organizations (RICO) Act, alleging a coordinated enterprise between Zillow and partner brokerages to use deceptive practices to profit at every stage of the homebuying process. 

If you plan to sell your home, now is the best time to attend our Free Home Selling Seminars. If you want to attend a seminar, contact us, and we will notify you when they are scheduled. As always, you can check KopaSeminar.com to see the dates and times of our in-person and online Free Home Selling Seminars. For years, home sellers have told me they benefited from attending our events. Sign up for our Free Home Selling Seminar in Austin or Cedar Park at KopaSeminar.com.

The information on this page may have changed since we first published it. We give great real estate advice, but this page (and the rest of our site) is for informational use only and is no substitute for actual real estate, legal and financial advice. If you’d like to establish a Broker-client relationship, reach out to us and we’ll tell you how we can make it official. Sending us an email or reading this page alone doesn’t mean we represent you.