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What to know about procuring cause and earning commission

by | Jun 1, 2021 | Real Estate Transactions, Residential Real Estate |

Many realtors love to help buyers find their dream homes. They enjoy connecting with people and aiding them in one of the biggest purchases of their lives. Realtors also spend a lot of time helping home sellers sell their home and move on to something new. In the process, they work hard to earn their commissions.

However, sometimes, a real estate transaction becomes complicated. A real estate broker or sales assistant may not receive procuring cause and thus not get a commission for a property sale they had a role in. So, what should realtors know about procuring cause and settling a commission dispute?

Understanding procuring cause

An real estate agent has to do more than show a home to a buyer to qualify for the procuring cause of a sale and sales commission. Agents need to help buyers write an offer on a property, present that offer to the seller’s agent and negotiate a purchase agreement. The same goes for agents representing the home seller. They need to be involved in multiple aspects of the sale to earn the commission. Yet even if a realtor has a single-agent exclusive agreement with a buyer or seller, that doesn’t mean the realtor automatically earns commission on the transaction.

Procuring cause and commission disputes often center around if a real estate broker maintained a strong relationship with a buyer or seller throughout the process. For example, did the realtor contact the buyer about properties they may be interested in seeing? Or did the realtor abandon their relationship with a buyer after a while? Or did the realtor fail to prepare an offer on a property the buyer was interested in and then the buyer disengaged from the relationship?

Settling a procuring cause or commission dispute

Each procuring cause or commission dispute is evaluated on a case-by-case basis. To win a commission dispute, a realtor has to show through a preponderance of evidence that:

  • They were responsible for the buyer’s decision to purchase a property.
  • They helped facilitate a successful transaction without a break or interruption in service.

Realtors facing a commission dispute may need legal help to prepare evidence in a procuring cause hearing. They need to show they had an ongoing relationship with a buyer that wasn’t neglected or abandoned.

With the right preparation and help, realtors could receive commission or part of a commission on a sale, compensating them for their efforts in making the transaction a reality.