Real Estate Procuring Cause- Overview

Perhaps this is the most misunderstood issue among both consumers and Realtors in the Real Estate industry. This is closely connected to the related issue of buyer agency and the problem of the failure of many agents to properly disclose the potential for dual agency not only at first meeting but in advertising.

What is procuring cause? Which agents action resulted in (led to) the sale of a particular home? Should compensation be offered to buyer's agents through the MLS (Multiple Listing Service)?

See Procuring cause defined at IRED.com.

Think it can't trap you? 

See Procuring cause - what about the US Secretary of the Tresury.

Here is what NAR (National Association of Realtors)  says:
"Common misconceptions about NAR’s Code of Ethics can lead to unnecessary disputes with fellow practitioners. Example: procuring cause.
Misunderstanding: Showing a property proves procuring cause and entitles you to a commission if your buyer purchases the home.



The real story:
Procuring cause is a complex issue, and no one action ensures that you’re entitled to compensation after a sale. Appendix II to Part 10 of the Code of Ethics and Arbitration Manual gives a basic definition of procuring cause as “the uninterrupted series of causal events which results in the successful transaction.” Neither showing the property nor having a buyer’s representation agreement with the purchaser automatically demonstrates procuring cause."

 

Do you want to be 'estranged'?  'abandoned'?  Perhaps you should. It is the way out of the trap.

A key word in NAR's statement is the word "uninterrupted". If the agent abandons the buyer that is an interruption.  If the buyer becomes estranged from the agent that is an interruption.  The fact that the buyer was not told or did not know is NOT (at this point in time -2008) an interruption.

Is it just a matter of disclosing it?  If an agent has disclosed it, that still doesn't give the agent a free pass. They still have to "prove" PC.  See "About: Procuring Cause Disclosure.

(NAR - National Association of Realtors)



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