Procuring cause

The real estate profession has become increasingly based in legalities. While a handshake can signify an agreement, the contract is the foundation of the real estate transaction today.

With the increased focus on legal issues, NVAR provides members services in the legal arena. Various articles on current and hot legal topics are provided through the weekly NVAR Online News. In addition, the Legal Information Line is available to members.

There are many real estate related questions that arise often. These FAQs (Frequently Asked Questions) by topic are provided to assist you in finding quick answers.

Procuring cause

Q:  I showed a buyer a property on Friday.  He liked it but wanted to think about it.  On Monday I called him, he said he had made an offer on it with another agent.  I asked him when the other agent showed it to him, he said on Saturday after I had shown it to him.  Am I the procuring cause?

A:  THE National Association of REALTORS ® defines procuring cause in the Code of Ethics and Arbitration Manual.  It says, “…for  purposes of arbitration conducted by Boards and Association of REALTORS®, procuring cause in broker to broker disputes can be readily understood as the uninterrupted series of causal events which results in the successful transaction.  Or, in other words, what “caused” the successful transaction to come about.  “Successful transaction”, as used in these Arbitration Guidelines, is defined as “a sale that closes or a lease that is executed”.
Nevada case law in  Morrow v. Barger, defines procuring cause the same as the Code of Ethic, this way:
 “A finding of procuring cause requires the broker to demonstrate conduct that is more than merely trifling…. The broker must set in motion a chain of events which, without break in their continuity, cause the buyer and seller to come to terms as the proximate result of his particular activities.”