Zillow Raises Flex Fee to 40% of Agent Commission- DelPrete

The U.S. real estate portal Zillow has raised prices for agents using its Flex program according to real estate commentator and researcher, Mike DelPrete.

In a blog post, DelPrete showed how the percentage of an agent's commission Zillow takes for houses that transact for more than $500,000 has been raised from 35% to 40% in six regional markets.

At the end of the 2021 financial year, Zillow CEO Rich Barton told investors that he expected the company to be making $5 billion in revenue at a 45% EBITDA margin by the end of 2025. The Flex price hike seems to be a small step towards that lofty goal as the U.S. housing market continues to be sluggish.

The price increase appears to have occurred quietly in September in the Denver, New Haven, Cape Coral, Reno, Oklahoma City, and Greenville markets.

Under Zillow's Flex program selected agents don't pay the portal upfront but do pay the company a success fee if and when a lead transacts. At the time of writing, there were 11 so-called 'enhanced' regional markets where Zillow only uses its Flex model.

The model is very different from the company's main breadwinner, its Premier Agent product, which sees agents pay the portal for buyer leads.

Zillow has been progressively rolling out Flex in more markets and the model is seen in some quarters as Zillow's insurance play against two pending lawsuits which could impact its Premier Agent business.