Lennar Homes Basically Stole 10K In Broker Commissions.

Most people do not know what to look for when they are getting screwed by the builder's lender, but as a Hybrid Agent, I am licensed in both Real Estate and Mortgages. I know exactly how the numbers work. I would Never Ever use the builder’s lender when buying a home unless the incentives totally added up and in most cases they do not.  It is not in your best interest. All incentives that you think you are going to get will be eaten up by fees that you have no clue you should or shouldn't be paying. It is just the games they play; it's like a 3-card trick in a street card game. If you do not know what to look for, you get taken advantage of. Before you know it, it is too late and your money is gone.

I recently had a client with Lennar Homes that closed on a loan and the builder found a way to weasel out of paying us. This bad blood all started from the initial contract signing. You know how the builder wants to always control the financing and make the client pay way more for the loan than they should? Well, this is one of those scenarios. Lennar was upset from the beginning because they lost the deal to me a Hybrid Agent who provides The Best Deal In Real Estate. They were not able to make my client pay a higher interest rate with their in-house lender that they own.

Regardless of all the incentives they tried to make look good, they still could not beat the deal I was able to provide. They threw everything they could at my clients to try and get them to stay, but at the end of the day, the numbers just did not make sense. The deal with the Hybrid Agent was better! Much Better. In Total, $44,096 better. You can view those numbers in our Beat The Builders Lender Post. Apparently, the builder doesn't like losing money to an outside lender, because from that point on, I was enemy number 1. They tried everything. They made it extremely difficult to close the loan. Lennar even tried to hold the FHA case number which is a big issue with HUD. That act alone is enough to land them in hot water with FHA. I had to go through hell and high water just to get the case number released. All this after the client told them verbatim, they did not want to take their expensive loan. How expensive was the loan? See for yourself.

Lennar Delays Cost My Client Over $1900 Lock Extension Fees

Another huge issue with them is they were over 40 days late completing construction on the house. They used a 4-day freeze in Dallas to extend the closing over 30 days. The client whose rate was during a time of much lower interest rates had to pay money in order to keep their low interest rate. We locked early in an extended period based on the initial close date and of course they did not hit that date. They were not even in the ballpark. I mean it is cool to miss a date by a few days, but 40? That is just ridiculous! Let us face the facts here. It is not like they were building a full-on custom project. The clients purchased an inventory home. How do you miss those dates? Had these poor people living out of a box for quite some time because they were packed and ready to go.

Of course, Lennar chose to point out that their "Builder Contract" states that the house is basically finished when it is finished. They would not help the buyers out with the rate lock extension even when the house went into the next month.

Speaking of next month. Their contract states that if you use an outside lender and your home does not close on time and goes into the next month. Lennar will make you pay a fine of $2,000 dollars plus a daily penalty. Do you think they helped the client out when their extension went into the next 1.5 months off schedule? Of course... They Did Not!

So here is what happened  

As I stated before I'm licensed to practice both real estate and mortgages in the state of Texas and it's definitely legal. As a mortgage broker, I know some companies have an issue with it as they interpret the laws differently on certain types of loans. I made sure and I have the emails to prove that I did my due diligence so there would not be any issues that may come up in the future.

As luck would have it, there was an issue. This, of course, I could not blame Lennar Homes as it was not their call. What happened next was totally their call and they could have stepped up and done the right thing if it were not for GREED.

After speaking with the underwriter, I found a solution. All they wanted to have me do was get an amendment and have the contract put in my Real Estate Brokers' name. No big deal. After all, that is who they technically have the contract with. In Texas, all real estate contracts are with the Brokerage and not the Realtor.

I contacted the Lennar Closer who was super easy to work with. I explained the situation to him and what we needed to happen, and he said no problem. Just call Scott Maxwell and let him know to do the amendment as he could not do it. All amendments needed to come from sales. Awesome, I thought. Well, Scott Maxwell saw a way to keep 10K in the company's pocket. He flat-out refused to put the contract in the name of my Real Estate Broker so the brokerage could still be paid for bringing a client that was ready, willing, and able to close.

In fact, his exact words were, "The Only Way This Deal Will Close Is If The Brokerage Releases Lennar From Paying The Commission." You really cannot be serious, can you? We have got a family out here living out of boxes because you guys are 40 days behind schedule, and you are telling me the only way they can close is if their realtor does not get paid? WOW! He said, "Yes, we can sell the house for more if they don't close and that's pretty much it."

Naturally, I asked to speak to the next in line and I believe that was Larry. He was the regional or area manager and he was also upset they did not get to keep the loan in-house, to begin with. Regardless of the fact it was worse for the client. A higher rate, discount points, and a higher payment across the board. It was never about what was best for the client with them.

Well, Larry goes on to tell me they would not be changing the contract. I specifically asked him if he cared if this story got out to other agents and he did not care. His words were something along the lines that they were one of the only companies still bringing inventory to the public so he could really care less. We have got a bit of an inventory problem in the Dallas area so "some builders" are being jerks. They have even reduced the commission they pay agents that bring them, clients. At one point it was 3%, but now it is down to 1%. I brought this up to Larry as well, and he did not seem to care one bit. I am guessing he's banking on that inventory to be there forever.

I had to do right by the client

At the end of the day, the client that I took to Lennar Homes did not do anything wrong. They were stuck in the middle of a battle with a shady builder. I could have chosen to fight this, but that would have taken longer, and these poor people had been through enough. Their entire home buying experience was TOTALLY RUINED by the delays, the constant phone calls from Lennar Mortgage (after the client told them to stop by the way), and the non-caring attitude of the salesperson.

Basically, I ended up forfeiting the commission just so my client could get their home. Ethically, I had to do what was right for them to get their home. (someone had to). Not only did I give up over 10K in real estate commission, but I also had to go into the mortgage commission to make sure my clients still got their Hybrid Agent Rebate. That was half the real estate commission. So, I had to take over $5,000 dollars out of my own pocket for this. I know at the end of the day; I did the right thing for the client. I did not want to screw over my client like Lennar Homes decided to screw over me. I put good vibes into the universe, and I know they will one day come back to me 10 times over. As for Lennar Homes, Karma is a ... Well, you know the saying. A happy client will tell 3 people. An unsatisfied client will tell everyone that will listen. What category do you think I am in at this point? As a lender, each time I would call to get an update on construction, I felt as if I were bothering Scott. I should really go and leave a review for him, but at this point, it does not even matter. I am not asking anyone to boycott Lennar Homes, nor am I steering anyone away from them. I will just say be careful about who you choose to do business with. Everyone does not have the same ethics as you, and that could end up costing you more than the 10K they stole from me.