Zillow to pay $212.5 million to settle suit over its home-flipping flop

Zillow has agreed to pay $212.5 million in cash to settle a class action lawsuit from investors. The suit centers on Zillow Offers, the company's failed effort to buy homes and resell them. The company announced the deal on Wednesday, according to Reuters.

What happened

Zillow is best known as an online real estate marketplace. With Zillow Offers, it tried something different: buying houses itself and selling them again. Investors sued over that venture. A class action is a single lawsuit brought on behalf of a large group of people who say they were harmed in a similar way.

The settlement follows the Supreme Court's refusal to hear Zillow's appeal. That left the company without a higher court to turn to, and it chose to settle.

Who it affects

The money goes to settle claims from investors who sued. The payment is all cash, not stock or future promises. For Zillow, it is a large bill tied to a business line it has already shut down.

What is not known yet

The material available does not say how the money will be split among investors. It also does not say when payments might go out or whether a court still needs to approve the deal. Those details have not been reported here.

The lesson for owners

Big bets on new business lines can fail. They can also leave costly legal bills long after the bet ends. Any owner weighing a risky expansion should count that possible cost, not only the upside.