EXp Realty is now part of a six-month legal battle against Zillow, in which a group of 12 homebuyers accused Zillow of violating their state consumer rights, the Real Estate Settlement Procedures Act (RESPA), and the Racketeer Influenced and Corrupt Organizations Act (RICO).
The lawsuit, filed in Washington state, alleges that Zillow isn’t being forthcoming with homebuyers about its Flex program, in which agents pay a 40 percent referral fee for closed deals and agree to meet a Zillow Home Loans preapproval quota. Both program terms have resulted in higher costs for homebuyers through inflated commissions and the loss of an opportunity to secure more favorable mortgage terms, according to court documents.
The Real Brokerage and two real estate teams, Nevada-based GK Properties and Florida-based Frano Team, are already listed as co-defendants, and now eXp has been added for posting a series of YouTube videos explaining how agents can increase their Flex conversion rates. The amended complaint also highlighted the brokerage’s support of Zillow’s Listing Access Standards and noted that an eXp agent, listed as “R.H.,” represented Alucard Taylor, the plaintiff who filed the complaint in September.
“The Zillow Fraudulent Business Enterprise has consisted of legally distinct entities and individuals, including Zillow, Inc., Zillow Group, Inc., Zillow Homes, Inc., Zillow Listing Services, Inc., Zillow Home Loans, LLC, EXP Realty, LLC, GK Properties, Real Broker, LLC, the Frano Team, and other individuals and entities, including unknown third parties, who coordinated their conduct to fraudulently induce home buyers to use Zillow Flex agents and to illegally steer buyers to Zillow Home Loans, as alleged above,” the court document read.
An eXp spokesperson said the firm “has been improperly named in this matter.”
“Should we be drawn into this litigation, we will vigorously defend against these claims, which we believe have absolutely no merit,” the spokesperson told Real Estate News on Thursday.
Zillow has declined to make public statements about the complaint, instead pointing to its February motion to dismiss for failure to state a claim.
The portal’s attorneys said the plaintiffs’ complaint is based on a “nonsensical” chain of events, including homebuyers believing they’re being connected with the listing agent, despite having signed a touring agreement and a buyer-broker agreement. And if a homebuyer wanted to contact the listing agent, the portal said that information is “readily available” on each listing page.
Read the amended complaint below:
