What Is Procuring Cause in NYC Real Estate?

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What is procuring cause in real estate and what is procuring cause in New York City specifically? We'll demystify this topic on the following video. My name is Chris at Hauseit. Hauseit is the largest assisted For Sale By Owner and Buyer Agent Commission Rebate company in New York City, established 2014. You can learn more about how you can save money on broker commissions, whether you're buying or selling by checking us out at https://www.hauseit.com.

A real estate broker is considered to be the procuring cause of a transaction if he or she brought about a meeting of the minds and showed a direct and proximate link to the consummation of a transaction. In plain English, this means that a real estate broker must have submitted and negotiated successfully and accept an offer, and then materially participated in the accepted offer to contract signing stage, and then from contract signing all the way to closing.

Contrary to what you might have read in generic articles online, this does not mean that just showing a property is enough to be considered the procuring cause of a transaction. To be considered the procuring cause of a transaction an agent must show an unbroken chain of events that led to a sale on which he or she materially participated. Just as showing a property may not be enough even if you've showed it once or twice to a buyer.

Submitting an offer on behalf of a buyer does not necessarily mean that the agent who submitted the offer would be the procuring cause of the transaction. What is most key is to submit the offer and to negotiate an accepted offer. Typically, if an agent negotiates an accepted offer on behalf of a client and sees the transaction through the closing then he or she would be the procuring cause of the transaction. Keep in mind that if an accepted offer falls through then the whole thing resets and the buyer could potentially come back down the road with a different buyer's agent and negotiate a different deal in which case the new buyer's agent would be the procuring cause of the transaction.

And to take a step back we're really talking about the buy side where most disputes happen. Listing agents will typically always be the procuring cause of the sale but of course you can have a buyer's agent that is also the procuring cause of the sale. Of course, if the listing agent negotiates a deal directly with a buyer that is unrepresented then the listing agent can be the sole agent who is the sole procuring cause of the deal.

So, what if you're working with a buyer's agent already but you don't like him or her for whatever reason. Perhaps because you found out about the possibility of earning a buyer commission rebate which our never told you about. How should you go about switching agents specially if you have already communicated directly with the listing agent? Or perhaps if your buyer's agent has already submitted an offer for you. The first step is to document the firing of your former buyer's agent. You will want to send an email to the listing agent, ideally copying your buyer's agent, stipulating that you will no longer be working with said buyer's agent and said buyer's agent will no longer be representing you.

You should also in this email confirm that you will be rescinding the offer you have made if you have already made one through this former buyer's agent. You need to document this so there's no confusion later as to whether or not your buyer's agent still represents you. Then ideally, you should wait a few days and ideally look for a new property or different property with your new buyer's agent. However, if you're still considering the former property which you may have submitted an offer on, well, it gets a bit more grey but since you have fired your own buyer's agent and rescinded your formal offer, yes you can always revisit the property with your new buyer's agent and then ideally have your new buyer's agent submit a new and different offer on your behalf. After that, let your buyer's agent do his or her job and negotiate successfully a different deal for you. If you let your buyer's agent do his or her job.

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