Dems ask FTC to probe real estate platform referrals: Report 

Two federal lawmakers have reportedly asked the Federal Trade Commission (FTC) to take a closer look at the referral practices of major real estate platforms — including Zillow.

The request came just a couple of weeks after the home search giant formally responded to the FTC's antitrust allegations in a separate matter already playing out in court.

Concerns about 'deceptive' practices: Reps. Jennifer McClellan and Don Beyer, both Democrats from Virginia, sent the FTC their request on May 29, according to The Capitol Forum, which obtained a copy of the letter. The lawmakers asked the federal agency to investigate real estate platforms' referral practices, with Zillow reportedly the only company mentioned once by name in a footnote.

Some "deceptive or insufficiently transparent internet advertising and solicitation practices" allegedly used by certain real estate platforms "may be steering consumers in ways that are not readily apparent," which "may influence a buyer's choice of agent or lender without clear disclosure of underlying financial relationships or compensation structures," the letter reportedly said.

Buyers, for example, may incorrectly think they are contacting the listing agent for a home they're interested in on some of these platforms — and this, the letter said, "undermines informed consumer decision-making and distorts competition."

Real Estate News has not independently verified the letter's content and has reached out to McClellan's and Beyer's offices for further information.

What the lawmakers want: McClellan and Beyer reportedly asked the FTC to review consumer protection measures already in place and, from there, decide whether new guidance is needed.

Real Estate News has reached out to the FTC for comment.

Zillow referral program already targeted in court: Capitol Forum's report came more than eight months after a consumer filed a lawsuit against Zillow over its Flex referral program.

That case, now known as Taylor, was filed on behalf of a homebuyer plaintiff last September. It alleged that Zillow "tricks" buyers "into signing up with a Zillow agent," with the company getting 40% of the agent's commission if they are involved in Flex. Those buyers initially believe they are contacting the listing agent, the suit alleged, not a Zillow partner agent.

Zillow, which has tried to get the case tossed, has said the lawsuit "fundamentally misrepresents how Zillow operates and the value we've delivered to buyers, sellers and real estate professionals for nearly two decades."

A separate lawsuit filed by the FTC during the same month involves antitrust allegations linked to Zillow's rental listings deal with Redfin.

What Zillow had to say: When reached for comment, Zillow pointed to an April blog post that argued the referral program allegations made in the Taylor complaint don't "add up."

When a homebuyer clicks the "Contact agent" or "Request a tour" button on a listing that appears on Zillow, "they are connected with a real estate agent who will represent their interests," the post said. "Buyers are never required to work with that agent and remain free to choose anyone they prefer. The option to connect directly with the listing agent also appears on each home listing."

The Taylor case, Zillow wrote in the post, "keeps changing shape and rotating defendants," with multiple revisions filed over the past several months.

Zillow also referred Real Estate News to recent research suggesting that the typical homeseller loses about $2,000 on dual agency transactions, in which the buyer and seller of a home are represented by the same agent.