Understanding Procuring Cause: The Key to Seamless Real Estate Transactions
Introduction§
The concept of procuring cause plays a pivotal role in real estate transactions. It refers to the individual who initiated an unbroken series of events that lead to a successful deal. This person is often integral in connecting the buyer with the seller or a tenant with a landlord.
Examples and Key Insights§
In real estate, procuring cause usually identifies the real estate agent responsible for driving the buyer to buy a property. Generally, this is the buyer’s broker. However, consider the following scenario:
John meets Kelly through an open house. Kelly, an agent, shows him a remarkable property. Weeks later, without informing Kelly, John finalizes the deal with another agent, Sandra, who is officially John’s broker. In this case, Kelly might be entitled to the commission instead of Sandra as Kelly initiated the series of events leading to the purchase.
Complexity and Legal Considerations§
Understanding who the procuring cause is can be complex and is governed by state law. Conflicts over which agent should receive the commission can lead to lawsuits, potentially disrupting sales. To mitigate this, adhere to the guidance provided by your buyer’s broker or legal professionals.
Best Practices for Buyers§
When working with a buyer’s broker, it’s vital to follow their instructions when interacting with other agents. This helps in avoiding conflicts and ensures smooth transactions.
Being aware of the procuring cause principle can help both buyers and brokers navigate the intricate dynamics of real estate transactions more effectively and can prevent legal disputes down the line.
Related Terms: real estate agent, commission disputes, real estate law, brokerage.
