Buyer’s Choice Realty blog

As an active Realtor for over 20 years and a member of Professional Standards I have been on Procuring Cause Hearing Panels and have also had the responsibility to chair the hearings for the Realtor Association.  While the primary participants are Realtors, it is also possible that you as a consumer may be asked to participate and the results certainly would concern both you and your buyer’s agent.

It’s a little known fact among consumers, but many times when you contact a real estate agent they assume you are “their buyer” because you contacted them.  This sets up an expectation that they will receive a commission from the transaction when you close on a property whether or not it is their listing.  In fact, if it’s their listing, they may be looking for a double commission. That can get very sticky when a buyer purchases a property through their buyer’s agent and another Realtor believes you are “their buyer” and therefore they deserve the commission offered in the MLS.  They can then file a complaint against your buyer’s agent claiming they are the Procuring Cause because you are “their buyer”.

Procuring Cause is the sequence of events that leads to a sale.  That is how a hearing panel determines the real estate agent or broker who, by their actions in producing a buyer, brought about the sale of a property.  It can be a rather long process and even though your buyer’s agent may very well win, it could delay the agent’s compensation and if your buyer’s agent loses it could have financial repercussions for you as well.

Many times before a buyer engages a buyer’s agent they make contact with a number of real estate agents during the early stages of their home search.  Many times these agents later will call back or email you after you have already decided upon and officially engaged a buyer’s agent.  So rather than run the risk of making a transaction sticky and complicated, I recommend you simply notify them that you are now working with a buyer’s agent and all future communication should go through him or her.

It’s unfortunate that real estate can seem so consumer “unfriendly” in situations like this, so I like to make sure my friends and clients are aware of the issues involved in Procuring Cause.  The more communication and activity that goes on between the buyer and a real estate agent, the stronger their case at a Procuring Cause arbitration.  The sad thing is that most consumers have no idea of this underlying friction within our industry.

Here are some things you can do as a buyer to avoid a Procuring Cause problem.

* Always let other agents know you are working with a buyer’s agent. The agent should have asked you; but if not, be proactive and tell them.
* Sign a licensee/consumer relationship disclosure with your buyer’s agent.
* Sign a buyer agency agreement with your buyer’s agent. (make sure you can terminate if dissatisfied)
* Do not ask another agent to show you property.
* Do not call listing agents or other agents for property information.
* Make sure to leave your buyers agent’s cards or info at Open Houses.
* Always work through your buyer’s agent; you are not “bothering them”.

Have you as a consumer had any problem with Procuring Cause?

Ronn@BuyersChoiceRealty.com 800 252-8937