Lennar promised a $5000 bonus and a free Lexus to the Realtor who refered them the most business. The problem is that this offer was secretly sent out to buyer’s agents. This offer is only being sent to Realtors and is a reward for the Realtor’s loyalty to them... But wait a minute. Realtors working with buyers owe their loyalty to their buyers, not Lennar… Isn’t that bribery?
We believe that it is wrong and possibly illegal to offer money (or a Lexus) to the agent of the buyer without first obtaining their buyer’s consent. In fact, in the agency law books (see Restatement of Agency 2d) that we’ve looked at, it would seem that there is legal precedent indicating that this money really belongs to the buyer, not their agent. In other words, every bonus and every Lexus given out by Lennar really belongs to the buyers, not their agents.
How many buyers if told that they could choose between reducing the purchase price of their house by $5000 and a Lexus would instead choose to pay this to their agent as a bonus? We don’t think very many. That leads us to believe that this money is not being disclosed, or not being disclosed properly as the buyers’ money.
We’ve reported this to the Minnesota Commerce Department, but they remain silent on this issue. We are looking for suggestions on how best to alert consumers to this very important issue. Please help.
Here’s the ad sent out ONLY to Realtors:
