This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Lennar Looks to Revive Florida Sales

Recent data show the South Florida real estate market, like much of the country, may be slowing down. Some blame the recent hurricanes, others blame the departure of speculators from the market. Either way, Lennar (LEN - Get Report) hopes to boost sales in its Palm Beach division by raising its commissions to outside real estate brokers, after reducing them less than a year ago.

For its communities ranging from Boca Raton to Vero Beach, Lennar and its U.S. Home division are now offering a "3-4-5" program to outside brokers.

The program works as follows: If a broker sells one home, he gets a 3% commission; if he sells a second home, he gets a 4% commission; and if he sells a third home, he gets a 5% commission, according to a fax promoting the program that was sent to local brokers. Lennar's local sales offices confirmed that the program allows brokers to combine the sales across any of the nine communities in Lennar's Palm Beach division.

The move is a swift reversal from earlier this year, when sales were fatter and Lennar dropped its commission to real estate agents from 3% to 2%.

"They dropped commissions from 3% to 2% a year ago. They said we don't need realtors as much. ... Now that sales have dried, they didn't just go back to 3%, they went up to 5%," says Mike Morgan, broker-owner of real estate brokerage firm Morgan Florida. Morgan says other builders like KB Home (KBH - Get Report) and Centex (CTX) always kept their commissions at 3%. Morgan -- who has shorted several homebuilder stocks -- holds the theory that Lennar dropped the commission last year when sales to investors were booming, and is now raising the rate because investors have mostly exited the market.

The new broker incentive comes a month and a half after Lennar tried to boost sales in its Palm Beach division by dropping its strict antiflipping clauses that had been inserted in sales contracts to deter speculators from buying its homes.

1 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG
CTX $26.19 -0.15%
KBH $15.80 0.51%
LEN $48.51 0.58%
PHM $22.14 1.10%
TOL $38.43 0.92%

Markets

DOW 18,047.18 +12.25 0.07%
S&P 500 2,106.99 +6.59 0.31%
NASDAQ 5,022.8560 +28.2540 0.57%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs