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Procuring Cause

PROCURING CAUSE is defined as "The uninterrupted chain of events that ultimately results in a sale;" and/or "The effort which brings about the desired result, as in producing the buyer for the listed property."

The definitions appear simple enough to understand but as Becky Swann points out, in two articles she had published in IRED (The International Real Estate Digest) during August 2000, there are problems that home buyers must be made aware of in order to protect their rights:

"There is a potentially nasty problem out there, ready to trap them (Home Buyers), called Procuring Cause. The Money Secret Homebuyers Need to Know

"Without changes to the current procuring cause guidelines and procedures, home buyers, particularly first-time home buyers, will remain at a disadvantage if they do not have procuring cause explained to them as they begin their home search." Procuring Cause Myths

"Just looking at a few homes with an agent can force a home buyer into a precarious financial situation which prevents them from seeking advice and counsel from an agent who can ultimately protect their interests in the transaction." Procuring Cause Myths

Home Buyers must be familiar with Procuring Cause in order to PROTECT their rights to Independent Real Estate Representation and the REBATE promised them by their NHBRC Procured Home Buyer's Agent.

  1. Procuring Cause is a method used by home sellers to determine what or who motivated you, the home buyer, to visit the sellers New or Resale "Homes for Sale" for the FIRST TIME.
  2. Basically, Procuring Cause determines which Real Estate professional receives a commission (gets paid). Who you want to represent you is not even considered. Therefore, proper Registration is a major consideration when deciding a Procuring Cause issue.
  3. Avoid any direct contact with Realtors, real estate agents, builders, builder's salespersons and model home hosts.
    DON'T MAKE A VERY COSTLY MISTAKE

  4. Whenever you look at homes you must remember that salespersons represent the New Home Builder and the Resale Home Seller. They owe you no fiduciary duty. They are not required to warn you that you will lose your right to Independent representation if you register without your NHBRC Procured Home Buyer's Agent being with you.
  5. If you visit builder's models, new home developments, new home subdivisions, new home sales offices, open houses, resale homes of private individuals, or tour the Parade of Homes without your own personal Real Estate Representative (NHBRC Procured Home Buyer's Agent) and provide the seller's salesperson with your name, address, and phone number, you become REGISTERED.

    THE SIMPLE ACT OF REGISTERING COULD COST YOU THOUSANDS

  6. Typically, the seller's salespersons will ask you to sign a registration form, a guest book or even to enter a free drawing upon your FIRST VISIT to their "homes for sale" to prove you were at the model or open house. Sellers do this as a means to establish Procuring Cause. DO NOT SIGN ANYTHING - DO NOT GIVE ANYONE YOUR NAME, ADDRESS, OR PHONE NUMBER.
  7. New Home Builders could justifiably claim Procuring Cause and assert that their advertising, marketing, location, reputation and/or participation in the Parade of Homes caused you to visit their homes. If Procuring Cause is determined in their favor, they would not be legally obligated to pay a commission to your "Home Buyer's Agent."
  8. Resale Home salespersons could also justifiably claim Procuring Cause and assert that their yard sign, advertising and/or Open House caused you to visit the home or homes they've listed for sale. Again, if Procuring Cause is determined in their favor, they too would not be legally obligated to share a commission with your "Home Buyer's Agent."
  9. Unfortunately, NO COMMISSION = NO REBATE.

    REBATES RANGE FROM $1,000 TO $25,000+

  10. Why make a costly mistake that will give others the power to determine Procuring Cause for you? You could very easily lose your REBATE. DO NOT REGISTER until you have made an informed decision about real estate representation.
  11. If you must look at homes alone, whether before or after you have your own NHBRC Procured Home Buyer's Agent, YOU CAN ALWAYS SAY:
    "My Home Buyer's Agent is giving me a Rebate. He told me about the property, explained Procuring Cause and said I should ask if it would be alright to do a walk through. I do not intend to register at this time, but I will register when I have my agent with me."
  12. REMAIN ANONYMOUS and DON'T SHARE ANY PERSONAL INFORMATION. That way you will be protecting your right to a REBATE and REPRESENTATION from your own NHBRC Procured Home Buyer's Agent.
  13. YOU CAN REGISTER and EVEN ENTER A SELLER'S FREE DRAWING WHEN YOUR NHBRC PROCURED HOME BUYER'S AGENT IS WITH YOU.

There have been cases where there was representation but no compensation because of an improper registration. Neither you nor your Home Buyer's Agent wants that to happen, especially when your agent has agreed to contribute up to 50% of the selling side commission to you as a Cash Rebate or as credit on your HUD-1 Statement to assist you with your closing costs.

CONTACT US IMMEDIATELY if you see any NEW or RESALE homes you like and we will have your NHBRC Procured Home Buyer's Agent set up a time to register and view the homes with you.

Hillsborough, Pasco and Pinellas Counties, Florida: 727-420-1172

Toll Free Number: 1-866-289-4013

E-mail Address: NHBRC@aol.com

For More Information:

The Arizona Association has a very informative article entitled "Procuring Cause Q & A" - by Don Martin.

The San Diego Association has another great article entitled "Procuring Cause Guidelines" which discusses various factual situations with several different scenarios.

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