The Afzali Group
Mobile: (510) 648-8001
Fax: (510) 795-7187
Mustafa.Afzali@CBNorcal.com

What Is Procuring Cause?

You don't have to hop from agent to agent to end up causing commission legal disputes. If you're thinking, "What difference does it make since the seller pays the commission?" Be aware that today's buyers typically sign buyer broker agreements, making the buyer responsible for payment of the commission if the buyer defrauds the first buyers agent. Home buyers typically sign buyer broker agreements with their agent before writing offers.

The buyer broker agreement spells out precisely who represents the buyer. Commission disputes boil down to what is referred to in the industry as "procuring cause." The agent who ultimately caused the buyer to purchase the home is the procuring cause agent. That procuring cause agent does not necessarily have to be the agent who obtained the offer from the buyer, presented the offer and successfully negotiated the seller's acceptance of that offer.

Realize that when you speak to an agent at an open house, call an agent for information from a newspaper ad or ask an agent to show you a home, you might be opening a can of worms for yourself if you don't intend to buy a home through any of these agents. Your best bet to avoid procuring cause disputes is to be upfront with each real estate agent you interview and hire the best qualified professional to help you find a home. Use these tips to avoid being sued:

  • Don’t ask another agent to show you property unless you intend to hire them exclusively as your representative. Your agent is eager to help you. A small part of your agent's duties is to show you homes for sale, even if those are homes that you have located yourself. Let your agent earn his/her commission.
  • Say you are working with another agent. If an agent doesn’t ask if you're working with another agent, then promptly volunteer that information. Agents are supposed to ask you this question but sometimes they don't - they forget, are afraid to hear the answer, or become distracted. Set them straight immediately.
  • Sign a buyer broker agreement with your agent. Buyer broker agreements will clearly describe the duties, relationships, and compensation factors.
  • Sign an agency disclosure with your agent. Agency disclosures describe the various capacities under which an agent can operate. Since the agent doesn't know the specific capacity until a property is located, all capacities are described to you.
  • Do not call listing agents directly for information. Your agent will probably get more detailed information from the listing agent than you will get. There will be no confusion if your agent calls the listing agent. · Follow open house protocol if you go unescorted. If you attend Open Houses without your agent, hand your agent's business card to the agent hosting the Open. Sign guest books with your agent's name next to your own. Not only will this help protect you, the open house agent won't try to corral you or request personal information.

In a nutshell, choose your agent before you begin searching your next home.