You may unwittingly create a legal battle that could delay or stop the purchase of your dream home if you don’t know some procuring cause essentials so learning some basics of procuring cause will help you to better understand the home buying process and the perspective of real estate agents. Who cares about the perspective of real estate agents? Real estate agents. Who, like it or not, controls most real estate sales activity? Real estate agents. It’s better to understand and work with real estate agents then to disregard them as another hurdle in the home buying process. Work with real estate agents and they may help you with your dreams but work against real estate agents and they may make your life miserable if you don’t follow these procuring cause essentials.
I have an important reason for writing this post today. I am in the middle of a procuring cause dispute which could’ve been easily nipped in the bud if a few basic tenets were followed by the three parties involved. Am I blameless? No. I described the situation in a blog that I wrote a couple of days ago entitled “Bad Attorney! No Commission For You!” I wrote that post when I was furious but I’ve had some time to reflect and although I think that the attorney involved, acting as a real estate agent, has his share of blame to bear, I can’t help to think that I could’ve staved off some of this heartache by asking a simple question to the buyer which I had never asked.
Back to the basics! What is procuring cause? Here’s a definition of “procuring cause” provided by the Massachusetts Association of Realtors:
- A broker is regarded as the “procuring cause” of a sale, so as to be entitled to commission if his or her efforts are the foundation on which negotiations resulting in a sale begin. It is the cause originating a series of events which, without break in their continuity, result in the accomplishment of the prime objective of the employment of the broker who produces a ready, willing, and able purchaser to buy real estate on the owner’s terms.
Procuring cause is not a set of rules or an idea that’s set in stone. Defining whether or not procuring cause has been established by the aggrieved party needs to be hashed out by the parties but sometimes it takes an arbitrator or a judge to decide whether or not procuring cause has been established. It’s sometimes an impossibly gray area. To lay procuring cause out in layman’s terms, dance with the one that brought you. Here’s a musical interlude by Shania Twain.
That seems easy enough, right? Dance with the one that brought you and you can’t go wrong. By the way, that guy that looked awfully familiar in the video was actually Charles Durning. You’ve seen him in movies like The Sting, Tootsie and Dick Tracy.
In the case of the attorney that I ran into a couple of days ago, I had no idea that this guy ever existed until four days into my dealings with the buyer. To recapitulate the proceedings: the buyer had contacted me directly on my listing through Realtor.com; we confirmed the showing; I showed her the property; we started to negotiate the price; I was in direct contact with her mortgage broker in order to get a copy of her pre-approval letter; she texted me a picture of her deposit check; I was about to write up the offer; and then she just about knocked me over on the fourth day of our relationship when she told me about the attorney, acting as a real estate agent, that was representing her. What?!
I, of course, felt like I was the guy that brought this buyer to the dance but was left alone on the dance floor. Could you blame me? I even shined my proverbial shoes! Damn it! She obviously had other ideas as to who her date was. There are really no forms that could help you with a relationship. Sure, there’s the Massachusetts Mandatory Licensee-Consumer Relationship Disclosure but that form is more of a declatory form. “Hey, I work for the seller” or “Hey, I work for the buyer” or “Hey, I work for nobody”. There are other types of “Hey, I work for…” situations like dual agency but dual agency is a hornet’s nest so I stay away from it. I could’ve brought up the idea of a Buyer’s Agency Agreement but I don’t think the first meeting is an appropriate time to talk about that.
Now back to the simple question that I could’ve asked right from the beginning. It’s so simple. “Are you working with another agent?” I asked a buyer to a dance without asking her if she’s dating anybody else. Does anybody really want to ask that question? No. Is it a question that needs to be asked? I guess. Think about it from my perspective. A buyer contacted me directly. Why wouldn’t that buyer contact her real estate agent first? Ignorance? Sure. Should I assume that all buyers are built the same way and that every buyer is up-to-date with the latest real estate protocols? Especially a first time buyer? No. My mistake.
Here’s what you can do as a buyer to help stave off these issues, and it’s important, because it’s like dating and you know how difficult dating is, right? When you meet a new real estate agent whether it be through sites like Realtor.com or at an open house, state that you are working with another real estate as soon as it’s appropriate in your initial conversation to do so. This puts everybody where they need to be. You are not being rude by telling that new real estate agent that you’re dating another real estate agent. We’d prefer to know that you’re dating another real estate agent too but you also need to know that we’d probably like to date you so we sometimes act like a coy teenager hoping to snag a good date to the dance. I’d rather be cast aside immediately and know my place rather than to gaze longingly into your pre-approval letter.