The Real Estate Encyclopedia
How Does Procuring Cause Work?
Category - Real Estate Information Sources - General Real Estate Information

The Procuring Cause, which sometimes is also known as the “predominant efficient cause” or the “contributing cause,” is the effort by an agent or broker, which brings about the sale of a home.  When a home is on the market, the desired result is the successful sale of the property.

 

The broker who is the "procuring or effective cause" of the sale is the one entitled to the commission, under an open listing scenario. For example, if a broker sends a prospective buyer to the seller’s home and the property owner sells the property to that buyer, the broker is considered to be the "procuring cause" of the sale and is entitled to the commission, even though the broker was not physically present when the buyer visited the property. 

 

Under an exclusive-right-to-sell listing agreement, the broker is entitled to a commission if the property is sold by the seller or by anyone else, such as the buyer’s broker or selling agent.  This method eliminates most procuring cause controversies.  Procuring cause issues sometimes arise, however, in disputes between the cooperating broker acting as a subagent and the listing broker, where both advise the buyer without knowledge of the other’s involvement.  Issues also arise when more than one buyer’s broker works with the buyer. 

 

Several state Realtor® boards adopted guidelines by which procuring cause disputes may be settled.  Different rules may apply when the cooperating broker is a buyer’s agent.  Procuring cause panels try to determine from all the facts who it was that initiated and carried forth the sequence of events that resulted in a successful transaction. 



References
 
Category(s)
Home Selling Questions - Agent, Offer & Commissions FAQ's
Home Selling Questions - Selling Legal & Closing FAQ's
Real Estate Information Sources - General Real Estate Information
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