There’s nothing quite like being a hostage, especially when you don’t even know you’ve been taken. Yet, every day, thousands upon thousands of home buyers across America are effectively becoming hostages, having their rights stolen by real estate agents who represent seller interests losing their ability to choose agents who will represent their best interests as buyers. Go to see a home with an agent – the trap is set. Go to an Open House – the trap is set. Think you’re free to look, no strings attached? Think again!
So, what’s the culprit behind this attempted theft of your rights? Organized real estate’s best kept dirty little secret Realtor® Procuring Cause .
Hardly ever disclosed, this Secret Contract can spring into action anytime you go to look at property with an agent even when that agent is bound, by law, to represent the best interests of the seller, which—in many states—is also not explained to you until it is too late to escape the Procuring Cause Trap. (Such as just before you want to write an offer.)The agent you have contacted about New Hampshire homes, probably is representing the seller . If you decide to purchase the home, the agent may claim he/she procured you as the Buyer. If you later decide to hire a buyer’s agent, you may be responsible for paying a commission to both agents .
What Is Realtor® Procuring Cause?
Procuring Cause is an antiquated system that was originally used to settle disputes between real estate firms when agents from two firms both claimed to have brought the same buyer to a successfully closed transaction. It originated before buyer agency existed, at a time when all buyers were unrepresented, and when their only choice was working with the agents of the seller.
Today, though, buyers have a choice that they didn’t have when Procuring Cause was first adopted – Buyer Agency. The job of a buyer’s agent is to work toward getting the buyer the lowest price, at the best possible terms. This is the exact opposite of the legal description of the seller’s agent, which is to get the seller the highest price at the best possible terms.
Given proper, timely disclosure most buyers would probably choose to use a buyer’s agent. Here, though, is where Procuring Cause becomes a problem.
When a seller lists a property for sale with a Realtor®, it’s almost always put on a Multiple Listing Service, with a certain amount being offered to whatever agent brings the buyer to the transaction.
Going to see a property, whether on a private showing or to an Open House, starts a chain of events which essentially shackles you to the agent who showed you the home you wish to purchase. Even though you didn’t sign anything, even though you weren’t told that an obligation was being created, you have, thanks to the Secret Contract of Procuring Cause, lost your right to choose representation. You are now stuck with an agent who almost certainly represents the seller, something else that likely was not disclosed to you. All of which is very likely to cost you dearly, in terms of time, money and effort!
How Procuring Cause Affects You?
When you have gone to see homes with an agent, or to an open house, no other agent, thereafter, is likely to offer you any services. Why? Remember that fee that is offered to whoever brings the buyer? It is now the property of the agent who first showed you the home. Never mind that they didn’t mention this to you, and never mind that the agent is likely to be working against your interests.
No other agent is likely to touch you, on any homes you’ve already seen, because if they did offer services, they would end up doing all the work, taking on all the liability only to see the check paid to them at closing, eventually go to the first licensee that showed you the home. (The one that trapped you.)
How? That first licensee would file a complaint with the local Realtor® Board, in what will likely be a successful attempt to strip your buyer’s agent of their duly earned fee, via Realtor® Arbitration. Not many agents are willing to risk working for free so, unless you are willing to pay them out of your own pocket, you are likely to have to forego representation from a buyer’s agent.
Again, remember no agent has bothered to tell you that going to see a home with them would create any kind of obligation and chances are very good that they also didn’t bother to tell you that they would be representing the seller, or that you had the option of buyer agency, before trapping you with Procuring Cause.
You might ask yourself does this really matter? Aren’t all licensees pretty much the same? Well is the obligation to work in the best interests of the seller the same as the obligation to work in the best interests of the buyer? No, not the same at all.
There are a number of reasons that Procuring Cause has not come to the forefront of public consciousness, to this point in time. One of the main reasons is that the vast majority of agents have the ability to benefit from the trap so they just snare all the unsuspecting buyers that they can, figuring that it will all even out.
Buyer’s, who probably aren’t getting the full picture about who represents whom, tend to find out that most of these agents who represent sellers are nice, friendly people, so they don’t necessarily have a reason to want to look for another agent. Certainly there’s nothing wrong with nice, friendly people but…
Who Are We, And, Why Do We Care?We are Exclusive Buyer Agents and we work only and always for home buyers. We do not list property. We do not represent seller interests. You get our undivided loyalty. We guarantee you things that no ordinary real estate firm can including the obligation to work toward getting you the best price, at the best possible terms, on the home that you want, regardless of the property you choose to buy.
Often, by the time you learn about us, you will have seen property with one or more, different licensees. Naturally, none of these licensees—will have told you about the Procuring Cause trap. They certainly have not told you about EXCLUSIVE buyer agency.
So, when you come to us, perhaps even having seen the home that will become the eventual one you want to pursue, the fact that you have had your rights stolen from you, has also stolen something of value from us; the opportunity to work with you.
This document was derived from Jay Reifert’s Procuring Cause Brochure.
A copy of that brochure can be viewed at: http://www.real-reform.org/pc.pdf
For the best possible home buying experience, we suggest that you call and compare services of agents before you begin looking at any home.