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Zillow lawsuit illustrates many layers of real estate law

Real estate law is like a hydra. The mythical beast with many heads has more in common with real estate transactions then you may realize. It seems each time you tackle one issue, others arise.

Putting together and reviewing initial offer documents, addressing inspection issues, conducting title searches and navigating closing issues are just some of the more common real estate matters that may require attention.

More obscure issues can develop. An interesting case involving the Google of real estate properties showcases just how complex real estate law can be. In this case, as real estate law issues branch out into the realm of business law the analogy to a hydra becomes more apparent.

Zillow takes on Realtors

The lawsuit involved allegations of stolen trade secrets. The accusations came from Dow Jones, owner of the company that runs the website for The National Association of Realtors, Realtor.com. According to Dow, Zillow had hired executives from the company in charge of running Realtor.com. By hiring these individuals, Dow claimed Zillow was now privy to Realtor.com's trade secrets.

If true, it would be possible that Zillow could use this information to have an unfair advantage over Realtor.com. Could Zillow provide data on the real estate market that would otherwise not be available? Would potential buyers of property have information without using licensed Realtors? How could access to this information impact real estate transactions? These are just a few of the questions that may have been addressed if the case had gone to court.

Ultimately, Zillow chose to settle the lawsuit instead of fighting the allegations in court. Zillow is adamant that they did nothing wrong, but decided to settle the lawsuit so the company could focus instead on growth and innovation.

What can I learn from this lawsuit?

Although this lawsuit does not have a direct effect on everyday real estate transactions, it does showcase the many moving parts of real estate law.

Buyers and sellers of property can use this case as an example. Not all the moving parts of real estate law are apparent. Additional issues may be present under the surface. As a result, it is often wise to seek legal representation to review a real estate transaction before finalizing a deal.

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