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Buyer Representation and Procuring Cause Concepts

Buyer Representation and Procuring Cause Concepts

posted: 07/29/2019

Some concepts to remember about buyer representation agreements and procuring cause.

  • Buyer Representation Agreements and entitlement to compensation through MLS are two separate issues.
  • To be entitled to the compensation offered through MLS, the selling broker must be the procuring cause of the sale.
  • Procuring cause is defined as the broker who started the uninterrupted chain of events that lead to the closing.
  • When a buyer who signed a buyer’s rep agreement ditches that Broker and buys from another Broker during the term of the agreement, it generally means the buyer didn’t understand the agreement he signed.
  • By license law, a buyer can be released from a buyer representation agreement with at 14 days written notice to the Broker.
  • If a buyer signed a representation agreement with one Broker but purchased a property from another Broker, the dispute is between the parties to the agreement and not with the Broker who took the buyer to closing.
  • A buyer who signs a buyer representation agreement should never have to say, “I didn’t know what I was signing. He just sent that form to me with a bunch of other forms to sign.”