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Procuring Cause and Buyer Representation Agreements

Procuring Cause and Buyer Representation Agreements

posted: 04/22/2019

If you enter into a buyer representation agreement with a buyer and your buyer “gets loose,” buying directly from a seller or through another Broker in MLS, the buyer representation agreement isn’t a determiner of procuring cause. To be procuring cause, you must be able to demonstrate that you started the uninterrupted chain of events that lead to the successful closing. The fact that you had a buyer representation agreement will be a factor a hearing panel will consider in an arbitration hearing, but it does not determine procuring cause. Keeping a buyer loyal through the use of a representation agreement requires more than just a signature on a document. It requires a tremendous amount of education up-front with the buyer to ensure the buyer has a full understanding of the expectations and obligations you both have. When a buyer who is a party to a buyer rep agreement “gets loose” and buys from someone else it generally means they had no understanding of what they signed.