Are Zillow Flex agents required to send buyers to Zillow Home Loans?

"According to the report, agents, many of whom were former Zillow Flex agents, told The Capitol Forum that Zillow requires Flex agents to steer homebuyers to use Zillow Home Loans (ZHL) for their financing needs. Agents involved in Zillow Flex pay a percentage of their commission typically between 25% and 40% once the transaction closes. This enables teams and top agents to receive a stream of leads at no upfront cost."

"The agents interviewed told the publication that teams who are part of the Flex program must refer a certain number of homebuyer client leads obtained through the program to ZHL. According to The Capitol Forum, this requirement was previously met by prospective buyers having a short phone call with a ZHL agent. However, agents say that this requirement was recently tightened, requiring buyers to obtain loan preapprovals."

"Agents who spoke with The Capitol Forum, said they feel this requirement is a breach of RESPA as agents do not disclose that they are incentivized to push homebuyers toward using a ZHL financing product. Real estate professionals quoted in the article said they feel like they are being forced to connect buyers to ZHL and to sell ZHL services."

Zillow requires Flex agents to steer homebuyers to use Zillow Home Loans (ZHL) for financing. Flex agents pay roughly 25%–40% of their commission after closing, enabling teams and top agents to receive leads at no upfront cost. Teams in the Flex program must refer a set number of homebuyer leads to ZHL, and that requirement was tightened from brief phone calls to actual loan preapprovals. One Texas agent reported a 10% quota of leads must receive loan preapproval. Preapproval by a lender does not obligate buyers to use that lender. Zillow reduces leads or removes teams that fail quotas and rewards teams that meet or exceed quotas. A leaderboard ranks agents by predicted conversion rate and ZHL preapprovals. Agents say the incentives and quotas pressure them to steer buyers to ZHL and that lack of disclosure about those incentives may breach RESPA.

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