May 16th, 2022 at 9:11 pm
A. A commission dispute.
B. A commission dispute with a client.
C. A commission dispute with another agent.
D. A commission dispute with another brokerage.
E. An MLS commission dispute with another brokerage.
Answer: The correct answer is E. Given how hard you work as an agent, you should make sure to protect your own entitlement to compensation. Most notably, agents should take the time to learn about and understand how to handle procuring cause matters, as to be more fully discussed in next week’s Legal Tip.
For this week, we are simply defining the general scope of a procuring cause claim. Some agents mistakenly think that “procuring cause” refers to any commission dispute. That’s Answer A, and it’s incorrect. Some agents think it’s one of the other multiple choice answers B to D, which are also incorrect. In our industry, a “procuring cause claim” generally refers to a commission dispute between 2 buyers’ brokerages concerning the compensation offered through the MLS (Answer E).
Understanding the scope of a procuring cause claim is important for 2 reasons. First, you should know how to properly handle MLS procuring cause matters (to be discussed next week). Second, you should also be aware that procuring cause arguments may serve you no purpose for other non-procuring cause matters.
For example, a listing agent may try to argue that he or she deserves the listing over the prior listing brokerage, because of how much work the agent has done for the seller, and/or how the seller may prefer to work with that agent, rather than the prior agent. Yet, a listing agent’s claim for commission against a seller is, generally speaking, based mostly on whether the listing agent has a valid signed contract with the seller. How hard the agent may have worked, or who the client may prefer to work with, are arguments commonly made in procuring cause matters, but they may have no bearing on a commission claim against a seller (or another listing broker).
Stay Tuned Next Week: I hope I have piqued your interest. We’ll go over Procuring Cause Dos and Don’ts next week! For more information, see C.A.R.’s Procuring Cause Guidelines (password-protected for C.A.R. members only).
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