What is procuring cause in real estate sales?

[showtime]

Hi, can someone explain to me just what procuring cause means? For example, if you're a buyer and you reach out to the listing agent directly, at what point does it become impossible for you to loop in a buyer's agent?

To my understanding from reading the below article, if you submit an offer directly as a buyer, then it will be pretty hard for you to loop in a buyer's agent who will be the procuring cause of the sale.

[aslan]

Technically, there isn't a black and white answer to this, because if there's a dispute and it goes to arbitration (via REBNY in NYC) or litigation, then to be the procuring cause of the sale the agent must show that he or she had a more than tangential relationship to the deal, and that he or she effected a chain of events that led to the consummation of the deal.

In practice, this means that any offers should be submitted by your buyer's agent, and it's typically too late to loop in a buyer's agent if you have an accepted offer already directly with the listing agent.

However, if the listing agent is relatively relaxed, you can get away with rescinding your offer if it hasn't been accepted yet, and then re-submitting a new offer with a buyer's agent that you bring onboard.

However, not all listing agents will be so chill, and many will feel a bit of resentment at having gotten their hopes up that they would have a direct deal. This is why it's always better to go through your buyer's agent, especially for anything related to offers and negotiation.

If you have a buyer's agent, and even if the buyer's agent submits the offer for you, yet you continue to negotiate and speak with the listing agent directly, then a difficult listing agent can try to make a case that the buyer's agent wasn't a procuring cause of the sale. So definitely don't complicate things if you're a buyer, go through your buyer's agent!

[Eddie McGowan]

I'm one of the hearing panel members for arbitration commission disputes in LIBOR (Long Island Board of Realtors).

"Procuring Cause" Defined:
In New York State, a broker will be regarded as the "procuring cause" of a sale, so as to be entitled to a commission, if his efforts are the foundation on which the negotiations resulting in a sale are begun. That cause must have originated a series of events which, without break in their continuity, resulted in the accomplishment of the prime objective of the employment of the broker, who produced a purchaser ready, willing, and able to buy the real estate on the owner's terms.

The hearing panel will also look to see if that series (or chain) of events was broken or interrupted in any way, including by Abandonment (broker's inactivity or perceived inactivity) or Estrangement (broker acted or failed to act in a way that caused the purchaser to terminate their relationship).