The hits keep on coming for Zillow.
After first pausing in October and then officially sunsetting its iBuying business earlier this month, Zillow has now been hit by two investor class-action lawsuits that claim, among other things, that the real estate giant “made materially false and/or misleading statements” in regards to iBuying, failing to disclose to investors many fundamental issues that plaintiffs claim made it “reasonably likely” that Zillow would have to abandon the model.
Both suits are filed in federal court in Seattle, and both name CEO Richard Barton, CFO Allen Parker, COO Jeremy Wacksman and the Zillow Group, Inc. as defendants.
Zillow representatives could not immediately be reached for comment at press time.
A Zillow spokesperson told RISMedia via email that the company is “aware of the lawsuits filed recently and are currently reviewing them. As a general practice, we do not discuss pending litigation.”
One of the lawsuits cites many specific statements going back to February of this year when Barton, Allen and others spoke of how Zillow Offers—the company’s iBuying arm—would “accelerate” and continue to be a part of the company’s future. As recently as August, Barton said that Zillow Offers had remained “durable, even in this sizzling hot seller’s market.”
In September, Wacksman spoke at a tech conference, saying that the “strength and the appeal for Zillow Offers just continues to grow,” according to the lawsuit.
Though how far these lawsuits will go, or what effect—if any—they will have on the larger iBuying sector, remains uncertain, Zillow’s specific venture into iBuying appears to have been specifically misguided and mishandled, especially as other iBuyers have reported positive growth and revenue this quarter.
Jesse Williams is RISMedia’s associate online editor. Email him your real estate news ideas to jwilliams@rismedia.com.
The crux of real estate is personal service in the largest purchase of a persons life. Zillow has NEVER been personal on any level. From misinformed national algorithms to lack of disclosure, Zillow comes up short. It was only a matter of time for the irresponsible behavior to catch up with them.
Look like Zillow got caught inflating the housing market!!!!!