What Is Procuring Cause? Working With More Than One Real Estate Agent

If you are new to the home buying process, you may be wondering, "Can I work with more than one real estate agent?" Another way to say this is, "What is Procuring Cause?".

Procuring cause is simply which real estate agent gets paid the commission of a real estate sale. If you jump from one agent to another you may end up causing commission disputes between agents. The agent who caused the buyer to purchase the home is the procuring cause agent, and this may not be the agent who obtained or negotiated the offer.

Although you may think it does not matter since the seller pays the commission, you should know that buyers usually sign broker agreements, which makes the buyer responsible for paying the commission, although it is paid from the seller's proceeds.

If you speak to different agents from open houses, newspaper ads, or online listings, you could be creating a procuring cause problem for yourself if you do not intend to buy a home through any of these agents. To avoid procuring cause disputes, be honest with each agent you speak with and then engage the most qualified one for your situation. In the meantime, here are some tips to keep in mind.

How to avoid a problem with procuring cause

• Tell the agent that you are working with another agent. If the agent does not ask you, it would be best to volunteer the information. Agents should ask you, but many times they don't. Be upfront with them
• Sign a broker's agreement and an agency disclosure. The broker's agreement will clearly define the agent's compensation. The agency disclosure outlines the general capacities an agent can operate under.
• Do not ask another agent to show you property, or directly call other agents for information. Let your agent show you properties you are interested in, and to avoid confusion, let your agent also call the other listing agent for information.
• If you attend an open house without your agent, let the hosting agent know. Give your agent's business card to the agent hosting the open house, and sign the guest book with your agent's name next to your own. Doing so will help protect you and avoids any confusion.