Real Estate Term: Procuring Cause

Procuring Cause is a Real Estate term. Rebate Brokers have thrown the term around a lot because they write up offers, then give a rebate of the commission. In some cases, other agents have shown the buyer houses, some times several houses, helped line up a mortgage, and worked with the buyer until the buyer finds a house they want to make an offer on. The buyer, in some cases, has gone to the rebate broker after spending hours working with a full commission agent. When the buyer, under these circumstances, writes the offer with the rebate broker, the other agent can, in some cases, claim the commission.

There are things an agent can do to protect themselves, like having a Buyer’s Agency Agreement, but many buyers want to keep their options open, so they are reluctant to sign a Buyer’s Agency Agreement. There are pros, and cons to having an Agreement, but that is an article for another time. The fact is many agents are wiser now than when rebate Brokerage was a new idea.

Rebate Brokers have also cautioned buyers about Procuring Cause, that’s how the subject came up.

It’s a complicated process to claim a commission. It’s done by arbitration, and usually is done between the Brokers. The buyer can do what ever they want. The buyer isn’t obligated, legally, to write up an offer with the agent who showed them a property. Just because some one is there doesn’t mean they are contributing to the buying process. The other thing that is very true is that most buyers use online searches, and so the Brokerages that provide those services should probably claim procuring cause.

This article is just a caution to make buyers aware that there is this issue, but it is a minor part of the home buying process.