Procurring Agent

[DebbieJ]

It's been awhile since I've been on the boards Been busy, thankfully!

What is the definition of procurring agent?

I am the listing agent, so I'm not affected by this. An agent in my office showed the buyer (wife) my listing and other listings. Another agent was showing property to the husband, wrote a contract on a different unit, that fell thru, then wrote an offer on my listing.

I thought the procurring agent is the one who writes the contract? Buyer (husband) did not want to use the agent in my office, either.

Thanks!

[John Allen]

Debbie,

Below is a link to a good explanation of procuring cause:

homebuying.about.com/od/realestateagents/qt/Procuringcause.htm

[DMG]

I had a procuring agent deal last year...

Some local buyers in my area went to an open house (not my listing nor listed by my company) looked at the home, asked some general questions at that point. They went home and then called that listing agent to ask about taxes. Next day they called me to show it to them, I did, they wrote and I presented.

The listing agent said is this the same couple through my open and I said yes it was, he accepted the offer and we went to close. After close he refused to pay me sating he was procuring cause, he never mentioned this before, we went in front of the board of Realtors, he said his reason was they never would have seen the home without his open house signs and then I gave my side with a written letter from the buyer stating they never would have bought the home through him, they only stopped in the open but always intended on calling me, the board of realtors ruled he was the main cause so I got 25% of what I should have got so in that case the guy (me) who wrote the pa and had them under buyer contract got the short end of the deal...

At the point he asked who the buyers were and if they were at the open of his I even went on to say...(if it's a problem let me know, I also said "hey they called me but if you feel it's not right, as they came through your open how about I shoot you a referal on the deal?", even though I have known these specific buyers for years, I just wanted him to know I was not there to step on anyone's toes)

Since then that agent has got out of real estate and sells insurance I heard....

[Nola Realty]

How did this situation get developed anyhow? When meeting with clients, do you talk about marital status, children, size home, ammenties, etc. I know sometimes savy buyers can place realtors in awkward situations. In this case, was there any buyer agreement or agency disclosure signed? What does your local board of realtors ethics standards say about procurring cause? I use an old rule of thumb, whoever brings the client across the threshold.... Check with your local board....

[SLP-NYCT]

@ Derrick,

I hope you are never in that situation again. Too many people go to an ethics hearing or arbitration prepared as if they were telling their best friend about the deal who of course will side with them.

@ All: If you are being brought in front of any panel; Hearing, Board, Arbitration, Court, what you want to do is to try your case in front of people who know nothing about it or you. Present the facts from both side and see what they say about it. Don't tell them which side is your and you should always present the case from the opponents side. In other words, make the strongest argument you can for the other side.

What this will teach you is what it is you need to overcome. This is the information that you then bring with you. Its simple to do. Just ask a friend of a friend or today we can even post them on here. Just don't tell us what side you are on.

@ Derrick again; My personal feeling is that you got screwed and the agent set out to screw you. That should have been the argument of the case and not that the buyers would not have bought without you. If you would have presented the argument from a standpoint that the agent knew who the buyers were, knew you were presenting the offer and expecting the commission, the situation should have been resolved then and there. My offers show the commission I expect and it is again stated in the Memo of Agreement. If the agent did not want to pay you that amount, that should have been discussed before the deal so you had the option of negotiating it with the buyers for them to pay you.

This is also another reason to have a signed Buyer Agency Agreement. If you have this in place and the other agent spoke to your clients WITHOUT inquiring as to if they were working with another Agent, they are guilty of Tortious Interference http://en.wikipedia.org/wiki/Tortious_interference

This is the very same reason we must say we are not soliciting listings already under contract with a co operating broker.

@ John: Nice article. Might want to incorporate that into my Buyer Info.

[Susan Zanzonico]

>>whoever brings the client across the threshold.... Check with your local board....

This is what I would agree with.

I have had a situation when an agent wrote a contract on my listing that wasn't accepted. About 2 months down the road, another agent wrote a contract on the same listing with the same buyers for the same price. At that point, we were willing to accept it and did. I spoke to my manager and in the best interest of the sellers, we moved forward knowing the full situation. I still had the first contract in my folder from the other agent which I gave to my manager. The home has long closed and as far as I know, the second agent who I don't believe had even seen the home when she wrote the contract collected 100% of the commission. To me that was very unfair. I believe its still unresolved.

[Nola Realty]

You know, sometimes we as licensed professionals have to look deep into ourselves for the right thing to do. I have been told and this works for me, " The softest pillow I can lay my onto at night is a clear Conscious.

[Susan Zanzonico]

Debbie, any updates on your situation?

[SLP-NYCT]

I have had a situation when an agent wrote a contract on my listing that wasn't accepted. About 2 months down the road, another agent wrote a contract on the same listing with the same buyers for the same price. At that point, we were willing to accept it and did. I spoke to my manager and in the best interest of the sellers, we moved forward knowing the full situation. I still had the first contract in my folder from the other agent which I gave to my manager. The home has long closed and as far as I know, the second agent who I don't believe had even seen the home when she wrote the contract collected 100% of the commission. To me that was very unfair. I believe its still unresolved.

I can fire my mechanic, I can fire my attorney, I can fire my employees and I can part ways with agents. Why can't a buyer fire their agent? Especially if they are not under contract. We need to all realize that, when working with Buyers. How is this any different that if you had a listing and it did not sell even though you had offers. The seller re lists with another broker. Same buyer comes back and re submits an offer and its now accepted. Do you, as the Original Listing Agent feel entitled to the commission?

I know in our contracts we have language in there about how any buyers that saw the house under our contract and buy after the listing expires still belong to us. Unfortunately, once they are under a new contract, thats pretty hard to enforce. Same with Buyer Contracts and Buyers.

[DMG]

Continuing from my post above and tagging off a couple of the replies on my situation, mine laid out like this.
Buyer was a past client of mine - I bought the buyers home for a rental and that’s why they were looking - they have bought from me before - they live next to my office - I have known them like 10 years - they stopped at a open they seen an ad for and called that agent that night with a couple questions - he then knew their name etc - next day I brought offer - he asked is this so and so? - I said yes, explained how they came to me and how I knew them, I also CLEARLY explained "I am NOT here to step on anyone’s toes and I do not do business that way", I know he had an open house etc and I offered CLEARLY at that time to pay him a referral (although I did not need to clearly, IMO), He told me "don’t worry about Derrick, the main deal lets just get it sold for my sellers, it happens sometimes where we all have clients driving around, no big deal" - so we signed a agreement and went to close.

It was after close and only after a easy successful close he said he "was not paying me as they came to his open" - I explained we had this talk and he refused to listen, he actually even had the guts to tell me he never said it was ok and he never said lets just get it done for my sellers...on a side note he sells about 5 - 10 homes a year where I sell on average 75-80 homes a year and typically with good agents, good closings etc, I think this was a hungry, look out for himself, unethical agent that blindsided me. He actually is out of the business now so maybe its karma...

Anyway at the board meeting I did explain my side as described above, provided a signed and notarized form from my buyer stating they "always intended to buy from me, they only stopped as driving by and seen a sign, they would not have bout the house without me" the board took that into consideration but in the end gave me partial monies due to my letter but said he was the "threshold" and that’s why they gave him the bigger portion.

My whole point is we all have buyers that may stop somewhere, may make a call, may ask someone something, its not ideal but it happens under contract or not under contract, I think the agent on the sell side should have been up front at the start when I asked him about it instead of games, and yes our area seems to go by the threshold rule which in the above story I personally do not always believe is the best way, I would not have done what he did. We all work hard and spend good money to get people to call our ads, come to opens, call us for buying and selling but just like most things and the story above I think there are exceptions to the rule...