We have now discussed the purpose of this series, the differences between best business practices, procuring cause and ethical conduct and looked at how one can win the compensation for a transaction, but still act unethically.
Now let’s take a look at an informative article written by attorney James Goldsmith regarding procuring cause. In this article, Goldsmith highlights brokers who try to sidestep the complexity of procuring cause by employing the doorstep rule with open houses. Unless the buyer agent accompanies his or her client to the open house, the buyer agent will not be compensated.
Goldsmith argues this is not what a broker agrees to when he or she becomes a member of the National Association of Realtors. He suggests that brokers refrain from this kind of behavior. The definition of procuring cause is included in NAR’s Code of Ethics and Arbitration Manual. I do not have this Manual and the actual Code of Ethics I find on NAR’s site does not refer to procuring cause.
The most helpful aspect of the article written by Goldsmith was the clarification of how we operate in the Lancaster Association of Realtors. We operate under the “Who Brings the Offer” rule. As an association we have chosen to eliminate the costly arbitration process brought on by procuring cause. This places us in a unique situation. It creates a much simpler situation with regard to conducting business. This is all I know and I like it. This is the quote:
These litmus tests (I refer to them as the doorstep rule and "who brings the offer" rule) have merit. Employing either would mean our local associations would no longer have to conduct costly arbitration hearings. After all, determining probable cause would then be a matter of simply identifying who introduced the buyer or who brought the agreement.
In the next installment, I will discuss the meaning, intended and unintended of using the words, Poaching My Buyer.
Other Posts in this Series: