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Procuring Cause

There’s a discussion thread on a Realtor message board that I participate on about Procuring Cause. It started with the posting of this webpage.

The article is correct in that with Realtors, the agent that first shows a property to a Buyer is entitled to the commission. But, I don’t agree with the way the article suggests to avoid “the trap”. I wouldn’t call it a trap either. I see Procuring Cause as a way to protect Realtors who have done a lot of work for a client that has no intention of using that Realtor to represent them. I bet most Realtor’s have stories about working months with a client to only be notified that they ended up buying a home through someone else.

Good Realtors don’t have the time to show houses to “home browsers”, they sell homes to serious and qualified Buyers. Some people that aren’t ready to buy a home think it’s ok to get a Realtor to spend their time and gas money to drive them around to look at properties. There are Realtors out there that will do that and they are probably the ones that won’t be in business for long since a Realtor only makes money when they sell a home.

If you are serious about buying a home, be aware of the following so you avoid possible commission fights:
– if you go to an Open House without a Realtor and end up making an offer on the house , the Agent sitting at the Open House may claim the commission. While it won’t cost the Buyer anything, this “fight for commission” between the Realtors does not help the principals in the transaction (the Buyer and Seller). You also want to avoid having the Listing Agent that represents the Seller be the one that represents you too. This is called “double ending” in the Realtor community and it’s like hitting a small Lotto jackpot for the Realtor since they get both sides of the commission. (I have never double-ended a transaction as I feel it’s too big of a legal risk to represent both parties).

Now saying that, Open Houses are a good way of getting an idea of what you get for the price if you are early in your home buying process. The Internet also provides a great way to preview homes but I know that some Listing Agents provide little info and photos.

If you do go to Open Houses and are asked if you are working with another Realtor, just tell them you’re working with me (Keith Byrd) and I told you to go look at the property. This will avoid them trying to “claim” you as theirs. Don’t worry…I’m not going to try to claim any commissions!

If you do contact a Realtor to show you property, don’t be surprised if they ask you questions like:

– are you working with another Realtor?
– have you talked to your bank or mortgage agent about what you can qualify for?
– how soon are you looking to make a purchase?

These questions help the Realtor determine where you’re at in the home buying process. If they don’t ask you these questions, just be forward and give them the answers anyways. It will only help you in the long run.

So there ya go, the website I posted at the beginning is critical about Realtors not informing Buyers about Procuring Cause so I wanted to give you my take on it. Before I got into the business, I had no clue about it either!

Written by Keith Byrd - Go to Keith's Website/Profile