Introduction

Zillow has dominated online real estate for years. Agents flocked to its Premier Agent and Flex programs, pouring tens of thousands of dollars into leads. Those programs promised an endless stream of clients. Now, the company faces multiple lawsuits and government actions that challenge its core business model. This post breaks down the legal issues and explains why relying on a single platform is risky.

The Lawsuits

Here’s what’s happening:

- Illegal kickbacks? A class‑action lawsuit filed in November 2025 accuses Zillow of steering buyers to its own mortgage arm, Zillow Home Loans. Plaintiffs say agents were pressured to send clients to Zillow’s lender or lose future leads. If true, this violates the Real Estate Settlement Procedures Act (RESPA), which bans kickbacks for referrals.

- Commission games. In September 2025 another suit targeted Zillow’s Flex referral program. It claims Zillow acts like a monopoly by sending buyers to partner agents who pay a 30–40 percent referral fee. This fee keeps total commissions high and hides costs from consumers.

- Antitrust case. The FTC and several states are suing Zillow and Redfin over a pact in which Zillow paid Redfin to exit the rental listings market. Regulators say this “pay‑to‑play” deal illegally reduced competition and harmed renters and landlords.

The Timeline

The controversies build on years of scrutiny. In 2017 the CFPB investigated Zillow’s earlier co‑marketing program for potential RESPA violations. In 2023 Zillow settled a class‑action tied to that probe. Then, within a few months in 2025, the three big cases above landed in court. The chart below summarizes the key events.

Why It Matters for Agents

These cases aren’t just corporate drama. They have real implications for agents:

- Regulatory risk. If agents took part in any steering scheme, they could face fines or even lose their licenses. RESPA penalties include up to $10 thousand per violation and jail time.

- Revenue shock. Teams that built their business on Flex leads may see a sudden drop if courts force Zillow to change how it operates. A 30–40 percent referral fee already squeezes margins. New rules or settlements could dry up leads entirely.

- Reputation. Clients expect unbiased advice. If they learn their agent pushed a certain lender to keep a lead flow, trust evaporates. Nothing kills a referral business faster than a broken reputation.

Build Your Own Database

I once spent more than $60 thousand a month on Zillow leads. It felt like the only way to compete. When Zillow failed to deliver, I was stuck waiting years to recover nearly $200 thousand in wasted spend. These lawsuits confirm what that experience taught me: owning your relationships is the only safe strategy.

Here’s how to take control:

- Use a CRM. Store and track every contact you meet. Segment your sphere into leads, past clients, and referral sources. Automate follow‑ups so no one slips through the cracks.

- Offer real value. Send market updates, explain changes in rates or laws, and answer questions quickly. The more value you provide, the less likely someone leaves your orbit.

- Diversify lead sources. Work open houses, network in the community, partner with local businesses, and leverage social media. A mix of sources means no single platform can shut down your pipeline.

- Protect your ethics. Never tie your clients to a particular lender or service because a third‑party demands it. Put their interests first. That builds trust and protects you from legal trouble.

Conclusion

Zillow’s legal battles show that no company is above the law. The government and private plaintiffs are challenging referral fees, steering practices, and anti‑competitive deals. Agents who depend solely on Zillow for business are exposed to serious risks. Instead, build your own database, nurture relationships, and prioritize ethics. When your business stands on a foundation you control, you can weather any storm, whether it comes from the market or the courthouse.