In a Securities and Exchange Commission (SEC) filing, Zillow said that, in February, it received a Notice and Opportunity to Respond and Advise (NORA) by the CFPB, with the letter alerting Zillow that the bureau was considering whether or not to recommend legal action against the company. The CFPB contended in the notice that Zillow violated Section 8 of the Real Estate Settlement Procedures Act and Section 1036 of the Consumer Financial Protection Act. Zillow said in the SEC filing that it responded in March of 2017 and held discussions with the CFPB following that.
Zillow then received a letter from the CFPB last week, alerting the company that it has completed its inquiry and didn’t plan on taking enforcement action. The company was also relieved from the document retention requirements of the CFPB during the investigation.
The ruling by the CFPB comes as Zillow is expanding its business idea from the buying and selling of homes. In April, Zillow said it is partnering with three brokerages: West USA Realty in Phoenix, Berkshire Hathaway HomeServices in Phoenix and Las Vegas, and Coldwell Banker Premier Real Estate in Las Vegas. Starting in the spring, home sellers in Phoenix and Las Vegas will be able to compare a real estate agents’ market valuation of their home with offers from Zillow and other investors. If Zillow buys the home, it said it would repair and update it as necessary, then list it as soon as possible. A local agent will represent Zillow in the transaction, enabling the agent to earn a commission.
The company is also expanding its Zillow Instant Offers into Phoenix, its service in which sellers receive investor offers alongside an analysis of the home’s market value. The offer comes within two business days of providing basic information about the house. Zillow started testing the service in May of 2017 in Las Vegas and Orlando, and is now adding Phoenix to the list. Zillow said the program gives real estate agents the ability to get new listings and that, via testing, it found most of the sellers who request an Instant Offer sell their home with the agent that did the analysis.