I know you already know where I stand on this issue from my posts on other threads. I am answering on this thread for those who may not visit the former posts.
A Realtor hosting an open house is there as the sellers agent, and has a fiduciary responsibility to the seller. It is unrealistic to expect all buyers everywhere to be told that they cannot attend a public open house without their agent or without scheduling it the visit with their agent. Such defies the purpose of the ease of showing and attracting potential buyers to the sellers property.
If for some reason, a buyer attends an open house, states they have a Realtor, then continues to work with the Realtor who hosted the open house, a procuring cause might be established with that OH host. If a buyer attends an OH, and proceeds with all future dialogue w/ their Buyer Agent, the OH Host is not a procuring cause. In that instance, the OH Host fulfilled his/her duties to the seller in promoting and marketing the property. The mere visit to the OH does not meet the requirements of procuring cause.
Procuring cause is not limited to a single action, but a succession of actions that in totality are responsible for the buyer making a decision to purchase the property. What follows is a quote from my post on Trulia in August, 2007.
PROCURING CAUSE: Procuring cause is the interplay of factors which demonstrate the unbroken efforts of a broker (through their agent) that are responsible for the buyer making a decision to consummate the sale. I have seen other posts on the subject of â€œâ€œprocuring causeâ€â€ and found erroneous info. I have seen assertions that the person who wrote the contract is the procuring cause, and I have seen assertions that the person who first showed the property is the procuring cause. Neither stand on their own as a determinant. Procuring cause guidelines span pages of questions to explore in determining the continuity of the actions of the parties.
Here is an article and link from the NAR website that might help. http://www.realtor.org/rmotoolkits.nsf/pages/close28?OpenDoc
7 Key Questions To Determine Procuring Cause
The majority of commission disputes hinge on disagreements over whether individuals contributed significantly to making a sale. In determining if a cooperating salesperson or broker is entitled to a commission, consider the following:
1. When and how was the original introduction [of the buyer to the property] made?
2. Did the original introduction start an uninterrupted series of events leading to the sale?
3. Did the broker/salesperson who made the original introduction maintain contact with the buyers?
4. Did the broker/salesperson engage in conduct that prompted the buyer to look elsewhere for assistance?
5. If more than one cooperating broker was involved, was the second broker/salesperson aware of the prior introduction of the buyer to the property?
6. Was the introduction of a second broker an intrusion into the transaction or the result of estrangement or abandonment by the original broker?
7. Did the cooperating broker initiate a separate series of events, not dependent on the original brokerâ€™s/salespersonâ€™s efforts, that led to the successful transaction?
Adapted from Florida REALTORÂ® , January 1994
Mr. 99 & Associates, Inc.
Go to http://www.realtor.org and do a search for "Code of Ethics and Arbitration Manual". There is a wealth of information about the topic there and is the document given to the professional standard committee members when reviewing a commission dispute.
I agree with your sentiment but NAR has been getting away from requiring specific steps in consideration of compensation because of the troubles they have been having with the DOJ. Procuring cause has moved away from the threashold requirement as it used to be and is moving toward allowing the arbitration panels to weigh the facts and make a decision.
I've been on both sides of the PC issue and the one that gets the check- is usually the one that did the procuring. SHOWING something is far different than SELLING something.
Definition of procuring cause of a sale... the broker must have started or caused a chain of events that resulted in the sale. A broker who causes or completes such an action without a contract or without having been promised payment is a volunteer and may not legally claim compensation.
Jonathan, a courtesy phone call, should be just that... a courtesy call - not a requirement.
If someone cares about their reputation they will act courteously.
I believe compensation is earned and should be paid to the cooperating buyers agent who informs a buyer of a listing existence, brings a buyer, and properly handles the transaction from offer to negotiation through escrow to close and handing off keys. If the cooperating agent does not perform all of those actions, but does contribute significantly to a successful transaction, then compensation still should be paid, even if not "earned" in its entirety.