Procuring Cause

Hi Kate,  I wish the showing agent had pursued the answer that the buyer had seen the house before.  Obviously with another agent.

Kate,

This very situation happened to me.  Obviously, the open house agent did not ask the WHO had shown them the house.

This one bothers me. The buyers admit they have seen the house before...did the agent not ask if they were working with another agent? Unless there is more (and in my opinion a LOT more to the story, this doesn't speak well of our professional consideration to other agents) I think the panel got this one WRONG!

Very true - procuring cause has changed and it's not the old "threshold" rule anymore.  Just because you showed it, even multiple times, does not guarantee you a commission.  Tricky business we're in.

Hi Kate, this story surprised me too. Maybe there was some other stuff that wasn't told in this story, because it doesn't sound right.

Procuring cause is an "uninterrupted chain of events that lead to the eventual sale"... in your scenario, the chain was interrupted, and the open-house agent started a "new chain of events" leading to the sale.

but it's often very difficult, without all of the details, to see when and where the chain begins and ends.

Alan put it very well.  Procuring cause goes well beyond just showing a home to a buyer.  I'll bet most agents would get stumped by the example you put forth. 

I was one of the authors of "Procuring Cause for Buyers Agents" and have been to more PC hearings than I care to think about.

PC is one of the most misunderstood absurdities and the hearing panels that hear these cases are confused too.

I once sold a property to a buyer that another agent tried to negotiate for them the week before, and they failed. Agent filed a PC claim.   I was called in to arbitrate and frankly, I was sick of it.  So, instead I chose to sue the board of realtors for forcing me to arbitrate when I was being paid out of the contract.

Judge sided with me and the board dropped the case like a hot potato...not wanting to set a precedent.  I regret not pursuing it further.

Florida Law says that if you are being paid out of a contract, no one else can take your money...I have no doubt that other states have the same law, however until the rest stand up to NAR and their local boards, it will continue to be UNFAIR business as usual...

I agree that the second agent really was wrong to not pursue who had shown them the home first. I also agree that the second agent did go the extra mile to allow them to envision the home in a different way, and this is why she got the sale.

Perhaps had the first agent talked more about agency and loyalty, she would have been more apt to get the sale even though the second agent assisted their vision in a new way. 

There are so many factors in this story and we can all learn well from it. Educating buyers and being as helpful as possible at all times is what creates the bond of loyalty. And I do think a lot of buyers have a really hard time with vision and possibilities of a home. 

Kate, you shared a very informative post today on procuring cause. All of us need to understand that establishing procuring cause often involves more than just showing a property.

Thanks for posting this as I am also confused by procuring cause, evidently!  I would have thought the same as you.  Thanks again!

I think the second agent was 100% in the wrong and you should have won.  My two cents.                                                

And that's why my buyer's rep agreement has a provision that reads:  "EBA Portland, LLC will serve as the Broker of Record/Fiduciary and procuring case to Buyer(s) for all properties viewed/toured during the term of this agreement, including but not limited to: e-mail, flyers, websites, FBSO, Craigs List, foeclosure lists, new construction, tours, pre-tours, open houses and shall be entitled to compensation under the terms and conditions of this Agreement."

Kate:

Good that New Jersey is requiring taking procuring cause classes.  It is such a difficult subject and so hard to determine who is the procuring cause.  I guess that is why buyer's representation agreement are so important as Carla indicates above.

Kate, great information. I think the most important thing to know about procurring cause is that their is no litmus test. Their is no one action or activity that positively determines procurring cause. Often agents think because they showed the property first or wrote the offer, they will be considered the procurring cause but thats not necessecerily so. A hearing panel will look at the interplay of all the actions that took place to determine procurring cause. Sorry I typed it twice.

Kate, this one seems like you should have won it. Or maybe I just don't understand procurring cause like I should. Did you have a buyers contract?

I've volunteered on the Arbitration and Professional standards committee for about 6 years and never saw a Procuring Cause case won.  The feeling in this area is the buyer is free to choose their agent and unless the agent gets the contract signed they're not the procuring cause.  Buyer broker agreements obviate the need for procuring cause claims.