Agent Hopping and Procuring Cause
Consumers sometimes attempt to avoid working with a specific real estate agent until they are ready to write an offer. This is potentially dangerous and could put you and your agent in the middle of a commission dispute. You see, in the industry there is this thing called “procuring cause”, which means, who really caused the sale of the property. The agent with procuring cause is entitled to the compensation offered by the listing broker.
Imagine this scenario… You start house shopping by calling a listing agent on each property you want to see. You look at 10 houses with 10 different agents, but decide you’d like to work with one of those agents in particular, and sign a buyer’s agency contract with them. You then look at a few more houses, but decide that 4th house you saw with a different agent is the one you want. Well, who really caused the sale, the agent who showed it to you first, or the agent who showed it to you second and wrote the offer??? The listing agent then tries to claim she’s entitled to the full commission, but wait; you signed a contract with your buyer’s agent saying they would get paid for the sale. Dispute time! Yikes!
Thankfully we have never been involved in a dispute like this. Ultimately our goal (and what should be every agents goal) is to act in the best interest of our client. We’ve had a few greedy listing agents make things a little more difficult. We also had a buyer look at one of our listing with 2 different agents and offer with the second agent. Luckily in all these situations we were able to discuss and solve the issues with the other agents who acted professionally without disrupting our clients. However, I’ve heard of some nasty battles that don’t always turn out well.
As a buyer, what can you do to protect yourself and prevent complications?
- Interview agents from the beginning of your search. Ask friends for recommendations of agents, meet with a few of them, and drill them with questions. Then pick one to use as your agent.
- Do not ask another agent to show you a property. Your agent is eager to help you. Let your Realtor earn their commission. If they can’t meet your needs or schedule, ask them terminate any agreement you have so you can find a different agent who can serve you better.
- Don’t contact listing agents directly for information. If you have questions about a specific questions about a property, ask your agent and let them track down the information for you.
- Follow Open House Etiquette. Open houses are pretty much fair game. You are free to go to open houses without your buyer’s agent. Although, it’s best to let agent doing the open house know you are working with an agent.
My recommendation to fellow agents is that you remember a few simple rules:
- Your client’s interest comes before the interest of your commission. If a dispute arises, getting the deal closed for your client is the most important thing, sorting out your commission dispute should be secondary.
- Be professional and treat you industry colleagues with respect and understanding throughout any disagreements.
- Remember the Golden Rule, Do unto others as you would have them do to you. This usually solves most scenarios.