Brokers

Most Arbitration awards are based on the concept of Procuring Cause.

Procuring cause is often a misunderstood concept and misbeliefs. Before you file a claim for arbitration you should know what isn't procuring cause:

The threshold rule- the REALTOR that takes the buyer into the home has procuring cause; there is no threshold rule.

The buyer agency agreement- The REALTOR who has a buyer's agency agreement has procuring cause; procuring cause is property-specific not agent-specific. The buyer's agency agreement is between the agent and his/her customer. It does not dictate who is paid commission on a sale but rather how the buyer will compensate the agent for his services.

The "But I wrote the contract" argument- while this may assist in proving procuring cause in and of itself is not procuring cause.

The basic definition of procuring cause is this:

Procuring cause is defined legally and in the NAR Code of Ethics and Arbitration Manual as: A broker will be regarded as the “procuring cause” of a sale, so as to be entitled to commission, if his efforts are the foundation on which the negotiations resulting in a sale are begun. A cause originating a series of events which, without break in their continuity, result in accomplishment of prime objective of the employment of the broker who is producing a purchaser ready, willing, and able to buy real estate on the owner’s terms. Mohamed v. Robbins, 23 Ariz. App. 195, 531 p.2d 928, 930.

Procuring cause also has two additional concepts: Abandonment & Estrangement. If the buyer believes the REALTOR is not performing, by not responding (Abandonment) to the  or the buyer is no longer comfortable with the agent and stops responding to the agent (Estrangement). A third REALTOR in the transaction may have procuring cause even though the agent may have shown the property, written the contract, or has a buyer's agency agreement.

 

All these things play into a procuring cause claim; a panel of your peers must decide what circumstances weight more heavily in the timeline of events.