If you and another REALTOR® disagree about who earned the commission in a sale, the decision of an arbitration panel will turn on which REALTOR® was the procuring cause for the sale. NAR defines procuring cause as “the uninterrupted series of causal events which results in the successful transaction.”
Although NAR provides an extensive list of specific factors to be considered in procuring-cause disputes, most cases will turn on the following factors:
- Who first introduced the buyer to the property, and how was the introduction made?
- Was the series of events starting with the original introduction of the buyer to the property and ending with the sale hindered or interrupted in any way?
- If there was an interruption or break in the original series of events, how was it caused and by whom?
- Did the action or inaction of the original broker cause the buyer to seek the services of the second broker? For example, if the original broker did not call the buyer for three weeks after a showing, the hearing panel might decide that he abandoned the buyer and paved the way for the entry of the second broker.
- Did the second broker unnecessarily intervene or intrude into an existing relationship between the buyer and the original broker? For example, if the buyer looked at a home with the original broker and the next day wrote an offer through his cousin, the second broker, then the hearing panel might decide that the second broker intervened unnecessarily in the transaction.
- Did the conduct of the buyer or seller seek to or effectively freeze out the broker?
I worked with clients for approximately 8 weeks showing 30-50 houses, including showing them the one they bought twice. We put a contract on another house which they did not get. They became disgruntled and went to another brokerage to buy the previous home I had shown them twice. The selling agent called to tell me there was a contract on the house we saw twice, and thru discussion found out that it was MY clients. The agent who wrote up the sale had never even shown the property. The clincher: I DID NOT HAVE A SIGNED BUYERS REP AGREEMENT.… Read more »
correction: the LISTING agent called me to tell me a new offer came in on the property that was their second choice. We figured out it was my clients. There was a period of only a few days between our turned down offer on their first choice and the new offer they made on the second choice with another agent.
I’m sorry to say, but having a Buyer’s Rep doesn’t guarantee squat, especially @ arbitration. “they became disgruntled & went to another brokerage to buy the previous home I had shown twice.” – that’s a clear example of “break in series of events.” You gotta lick your wounds, learn from it and move on.
Since when did representing a buyer become a requirement to procuring a commission for services rendered!?
If you find yourself in a commission dispute, PLEASE take time to concisely draft your complaint or response! When you think you have it right, read it out loud to someone who does not know the story to make sure it makes sense and is accurate. Panel members spend a lot of time just trying to figure out the facts of what happened.
Yeah Dena… Really! Totally agree there are at least two sides to every story and maybe 3 or 4 as we see here. So here in this TAR post: “the extensive list of specific factors to be considered in procuring-cause disputes, most cases will turn on the following factors:” Then read the 6 factors that are considered…. here we have the descriptions “original Broker” , “second Broker” and then Robert here talks about a third Broker in his scenario and then of course you will have the Buyer’s version of the story. This TAR post is just a little vague.… Read more »
How about if an Agent put themselves as the broker even though the agent is not a broker, not telling the sponsoring broker and not having the sponsoring broker’s name or company on the purchase agreement and stating that said agent was to get all commission, it was discovered when the title company told the sponsoring broker what was going on, there by the sponsoring broker did receive the commission and withheld the commission of the agent who committed fraud
Why no mention of a BRA? Don’t they matter?
A signed Buyers Representation Agreement (ABR) does not give you procuring cause on any transaction. Agents know your business and forms. Ultimately it’s the client who is going to be honest and loyal to you or not. If you have open, honest communication most are loyal. We are dealing with humans here so some are NOT.
Procuring Cause. We need to pay attention and we need to remember who our colleagues are and keep OUR INDUSTRY raising the bar when it comes to Professionalism. The consumer is not going to do THAT for us. Yes, perhaps some bad apples out there but we don’t have to add to the problem. Real scenario: One of our agents rcvd a call from a buyer regarding one of our company listings. The typical conversation…information about Broker Services and “Are you currently working with another Realtor?” It was revealed later that the buyer actually did have a buyer rep with… Read more »
It all begins and ends with the BRA. ABR’s know this.
All agents should.
Incorrect! And, a way to get into a lot of trouble if you practice that!
I wish there was more protection for sales agents who essentially have comp stolen by a shady broker. The only recourse is a costly lawsuit. This is one of many why I opened my own shop.
What is the best way to draft a formal complaint? I have a buyers rep, client bought a house with another agent. we looked at SEVERAL homes, put in offers, etc. Search still set up, communication still happening. I haven’t said anything to other agent or client. Thanks for any help!
You all are failing us as real estate agents, it is so unfair that a real estate agent posing as a broker can steal my commission checks and you all don’t see anything wrong with that. You all always want to refer us to costly legal services, some of us don’t have that type of money to spare. You all need to do your jobs and stop just collecting a paycheck to say you are doing something when you are not. The strange part is you all denied my claim but approved her defamation claim. How does a defamation of… Read more »