Zillow Agrees to $212.5 Million Settlement in Class Action Lawsuit
Zillow will pay $212.5 million to resolve a class action lawsuit tied to its failed home-buying venture, court records show.
Zillow Group has agreed to pay $212.5 million to settle a class action lawsuit stemming from its now-defunct iBuying business, according to court filings. The settlement closes a legal chapter that began after the online real estate platform shuttered its Zillow Offers program following substantial financial losses.
The iBuying model — in which companies purchase homes directly from sellers, renovate them, and resell at a profit — proved far more volatile than Zillow anticipated. The company exited the business in late 2021 after algorithmic pricing errors led to billions of dollars in inventory write-downs, catching investors off guard and triggering a sharp decline in the company's stock price.
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The class action alleged that Zillow misled shareholders about the health and sustainability of its iBuying operation, concealing the risks associated with its automated home-valuation technology. Investors who purchased shares during the relevant period argued they suffered significant losses when the truth about the program's failures became public.
A $212.5 million payout would rank among the more substantial securities class action settlements in the real estate technology sector. Settlements of this scale typically require court approval before funds are distributed to eligible class members, a process that can take several months to complete.
Zillow has not admitted wrongdoing as part of the agreement, which is standard practice in securities litigation settlements. The resolution allows the company to move forward without the continued uncertainty of protracted litigation. Continue reading at All News.
