Procuring cause is a crucial concept in the real estate industry that determines which real estate agent is entitled to receive the commission for a successful transaction. It refers to the agent’s actions and efforts that directly lead to the sale or lease of a property. In this article, we will delve deeper into the concept of procuring cause, exploring its significance, factors considered, and its application in real estate transactions.
Understanding Procuring Cause
Procuring cause is the term used to describe the agent’s role in initiating a series of events that ultimately results in the successful sale or lease of a property. It determines the agent’s entitlement to the commission and helps resolve disputes between multiple agents who claim to have played a role in the transaction.
To establish procuring cause, several factors are considered, including:
Efforts and Actions: The agent’s efforts and actions in finding and introducing the buyer or tenant to the property are crucial. This includes activities such as property showings, negotiations, and facilitating communication between the parties involved.
Timing: The timing of the agent’s involvement is also a significant factor. If an agent has been working with a buyer or tenant for an extended period and has made substantial progress towards the transaction, they are more likely to be considered the procuring cause.
Client Relationship: The strength of the agent’s relationship with the buyer or tenant is another important aspect. If the agent has a long-standing relationship with the client, it may strengthen their claim as the procuring cause.
Intent: The intent of the parties involved is also taken into account. If the buyer or tenant specifically sought out the services of a particular agent and expressed their intention to work exclusively with them, it can influence the determination of procuring cause.
Application of Procuring Cause
Procuring cause is most commonly applied in situations where multiple agents are involved in a transaction or when there is a dispute over commission entitlement. In such cases, the real estate brokerages and associations may have specific procedures and guidelines to resolve the issue.
These procedures often involve a committee or panel that reviews the evidence presented by the agents involved and makes a determination based on the factors of procuring cause. The committee may consider documentation such as emails, contracts, and client statements to assess the agent’s efforts and involvement.
It is important to note that procuring cause is a subjective concept, and its application can vary depending on the jurisdiction and the specific circumstances of the transaction. Real estate professionals should familiarize themselves with the local regulations and guidelines to understand how procuring cause is handled in their area.
Procuring cause plays a vital role in determining the rightful recipient of the commission in real estate transactions. It considers the agent’s efforts, timing, client relationship, and intent to establish who initiated the chain of events leading to a successful sale or lease. Understanding procuring cause and its application is crucial for real estate professionals to navigate disputes and ensure fair compensation for their services.
– National Association of Realtors: nar.realtor
– Real Estate Council of Ontario: www.reco.on.ca
– California Association of Realtors: www.car.org