In an email and video message sent to Preferred agents on Thursday, the company’s head of Zillow Preferred answered frequently asked questions and reassured agents that legal experts review all programs.
The real estate industry’s best-known portal has been under a lot of pressure after becoming the recipient of lawsuits over alleged copyright infringement, broker kickbacks with its mortgage arm, deceptive Flex agent tactics, antitrust violations with its rental syndication agreements and more.
Now it appears that some of Zillow’s partner agents — once known as Flex agents, and now as Preferred agents — may be getting a little spooked by all the negative headlines.
Inman learned that the company on Thursday sent out an email from Senior Vice President and General Manager of Zillow Preferred Zuhairah Washington to Zillow’s Preferred partner agents to provide “clarity and reassurance” regarding the litigation and what it means for agents.
On Friday, the video from the email was published to Zillow’s agent-facing website. Zillow declined to comment further on the message.
The video largely seemed to address allegations levied in the recent class-action lawsuits over kickbacks and misleading practices with the Preferred agent program.
“The claims in these lawsuits are false and fundamentally mischaracterize how Zillow Preferred operates,” Washington says. “Everything we do starts and ends with the consumer. Buyers and sellers deserve choice in who they work with and transparency throughout the process. And that has been core to our model from Day One.”
Washington went on to stress that Zillow takes compliance and legal issues very seriously.
“Zillow Preferred is built on a strong compliance foundation. We operate in a heavily regulated environment, and we design our programs with careful consideration of the rules — including RESPA [Real Estate Settlement Procedures Act]. We regularly review our processes with internal and external experts, and collaborate with these legal experts. And importantly, consumers maintain full lender choice, which is a critical component of RESPA compliance.”
Washington added that it was Zillow Home Loans’ job to earn clients’ business by providing competitive lending options for them. She also said the company had reason to believe the lawsuits against them were “competitively motivated,” but wanted to emphasize that Zillow is committed to supporting agents during this tumultuous time.
Any partners of the company who were specifically named in the lawsuits will have an opportunity to join a joint defense in the litigation with Zillow, Washington said, and the company will “vigorously defend against these claims.”
The litigation changes nothing about how Zillow Preferred operates or how agents work with consumers, Washington asserted.
“I take seriously the trust you place in us,” Washington continued. “You rely on us not just to deliver high-intent connections, but to do so in a way that protects you, your business and your clients.”
The email from Washington also asserted that assumptions made in the lawsuits about Zillow Home Loans’ pre-approval and shopping tools were inaccurate, maintaining that consumers can choose to work with whatever agent and lender they prefer.
One frequently asked question Zillow addressed in the email was whether or not agents put themselves at risk by participating in Zillow Preferred. The company replied by saying it “can’t predict every legal development,” but maintains that its business model is misrepresented in the lawsuit complaints. However, Zillow urged agents to follow their brokerage guidance, document places where consumers make their own choices during the transaction, and avoid any behavior that might come across as steering.
Regarding a common question about whether or not Zillow steers consumers toward certain lenders, the company said such claims “don’t reflect how Zillow operates,” and that consumers are free to choose their agents and lenders.
“Zillow only succeeds when you do,” Washington concluded in the video. “And we are committed to standing by, with you, through moments of industry uncertainty and beyond.”
