The legal definition of procuring cause focuses on “cause.” Cause is about responsibility. What procuring cause fights are about is figuring out who is responsible for the buyer purchasing this house at this time. For there to be a fight about responsibility, you have to have more than one person claiming they are responsible for the sale.
In the typical competing broker case, you have one agent who has in some way helped the buyer identify the property and another agent who helped them write the contract or assisted the buyer in performing the contract once written. Choosing between competing brokers requires a close examination of the entire course of events, from the time the buyer first learns of the property until they close the transaction. What this examination of events is aimed at is finding the actions that proved essential to the outcome.
The actions of an agent that are essential to a buyer closing a deal cannot simply be listed from showing to walkthrough inspection. Every deal is different. To decide procuring cause you have to find the point in time when the buyer decides this is the house they want to purchase. At that point, the buyer has been procured. Everything that comes after that decision is simply the buyer doing what has to be done to accomplish what the buyer has already decided to do. The agent who brings the buyer to the decision to purchase point is the procuring cause of the sale.
This way of looking at procuring cause is quite foreign to real estate agents. Real estate agents tend to think procuring cause is about the amount of work an agent does with a buyer or who represented the buyer or who worked with the buyer. It is not. Sellers do not pay agents to work with, assist or represent buyers. It just seems that way to the agent. What sellers pay for is the same thing they have always paid for: a buyer ready, willing and able to purchase on terms set by the seller. The amount of work involved for the buyer’s agent is completely irrelevant to the seller. The seller is paying the buyer’s agent to find the buyer and bring them to the place where they will do what is necessary to purchase the seller’s house.
Because procuring cause happens when the decision to purchase is first made, competing broker cases mostly split between showing and writing. One agent shows the property and another agent ends up writing the deal. There are, of course, thousands of variations on the theme. In the old days, local boards would sometimes try to resolve messy procuring cause fights by having “rules” like the “threshold rule” or the “he who writes” rule.
The “threshold rule” favored showing by siding with the agent who first gets the buyer to look at the property. The “he who writes” rule favored writing the contract by siding with the agent who actually got the buyer’s signature on the line. Such local rules are now banned by the National Association of REALTORS®. Banning rules, of course, doesn’t have any effect on the actual dispute between agents when one shows and the other writes. Showing and writing remain important events that have to be considered in determining procuring cause.
Because showing will always play an important role in procuring cause, a common ploy is for the agent who is going to write a deal for a buyer who has been working with another agent to schedule and conduct another showing. Such maneuvering generally fools no one. If the buyer is committed to the purchase already due to the efforts of the other agent, the second showing will not change anything. If the buyer is not committed, because they don’t trust the other agent or that agent has abandoned them or some other legitimate reason that would explain why they are going to another agent, the second showing will not change anything. The real question is why the buyer is not writing with the first agent, not whether the second agent showed the property.
Procuring cause ploys have developed at every transaction stage. For instance, there have been cases of agents convincing buyers involved in a dual representation transaction that they need “their own agent,” getting the buyer to sign an exclusive buyer service agreement and then claiming the selling side of the commission in a deal already written. That simply will not work under a procuring cause standard. Such cases point clearly at the difference between procuring cause and representation. The seller, through the listing agent, is not paying for buyer representation. The seller is paying for the buyer, not the buyer’s representation.
For REALTORS®, procuring cause fights are a matter for arbitration by a Professional Standards Panel of their local board. Procuring cause arbitration requires the Principal Broker’s permission. An agent considering bringing a procuring cause action should therefore start by bringing the matter to their principal broker. From there, filing is a matter of contacting the local board for an arbitration packet and following the procedures outlined in the packet. Larger boards have on-line filing programs that make filing a procuring cause claim fast and easy.
Procuring cause arbitration at the local board level is conducted under rules established by the National Association of REALTORS® (NAR). NAR publishes detailed “factors” for the use of arbitration panels in determining procuring cause. You can review these detailed factors online at:http://www.realtor.org/LetterLw.nsf/pages/95procuringcausefactors?OpenDocument.
In addition to the detailed factors published by NAR for the use of REALTOR® arbitration panels, NAR also offers procuring cause guidance to brokers in the form of seven questions that should be asked whenever procuring cause is in dispute. The questions are:
- When and how was the original introduction [of the buyer to the property] made?
- Did the original introduction start an uninterrupted series of events leading to the sale?
- Did the broker/salesperson who made the original introduction maintain contact with the buyers?
- Did the broker/salesperson engage in conduct that prompted the buyer to look elsewhere for assistance?
- If more than one cooperating broker was involved, was the second broker/salesperson aware of the prior introduction of the buyer to the property?
- Was the introduction of a second broker an intrusion into the transaction or the result of estrangement or abandonment by the original broker?
- Did the cooperating broker initiate a separate series of events, not dependent on the original broker’s/salesperson’s efforts, that led to the successful transaction?
Notice how the NAR questions focus on continuity of actions and events. Questions 2 and 7 are the decision questions. The rest of the questions are questions that support the answer to questions 2 and 7. In every case, the decision maker must decide between competing agents whose actions lead to the sale.
It is not hard to see that determining between competing agents whose actions lead to a sale can be very difficult. That difficulty creates uncertainty when competing broker situations arise. It is for that reason that experienced agents watch for potential procuring cause situations and either avoid them (no, I can’t write this for you) or negotiate around the problem (let me get this straightened out with the other agent before we write this). Negotiating around potential procuring cause problems may, of course, not always be possible. In such cases, documenting the buyer’s reasons for not continuing with the other agent will be a lot more useful if there is later a procuring cause fight than re-showing the property.
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