Procuring Cause

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 (especially) 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)?

Here is what NAR (National Association of Realtors) has said:
"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 an agent is entitled to compensation after a sale.

The Realtor 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."

Procuring Cause Arbitration Worksheet

Procuring Cause Worksheet

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 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.

Consumers should be able to pick their own agent without being trapped into a relationship they do not want and which was not properly disclosed to them.

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Copyright Paul Howard, All rights reserved.