Home Buying in Pennsylvania>Question Details

Mao, Home Buyer in Pennsylvania

Went to an open house, does this make the seller's agent the procuring cause?

Asked by Mao, Pennsylvania Sun Sep 21, 2008

I went to an open house (naively) after finding it on Trulia and researching it myself. I liked what I saw, but at the time didn't have an agent representing me. I ended up signing the sign-n sheet, but nothing else.

After seeing the house, I was very sure this one was the one for me. But since I didn't have an agent, I found and talked to one who doesn't work for the same broker (or company).

Here is where things get interesting. My soon-to-be agent gives me some background info about the procuring cause and such, and it sounds like either: the seller's agent gets the buyer's commission, someone within the broker gets it, or my agent would have to split it ---- none of the three I am comfortable with.

Has anyone experienced something like this? And would the seller's agent actually risk loosing a sale if they didn't get a cut of the buyer's commission? (If this is true there's a good chance I'll skip this house just on principal alone).

Thoughts, comments?


Help the community by answering this question:



Real estate is local and most of the traditions that go along with it, Procurring Cause however, is not. The concept is defined and maintained by the National Association of Realtors through the annual Code of Ethics and Arbitration Manual. Procuring cause is defined as the unbroken chain of events that leads to an offer. The person that will be credited with this is the person who starts that unbroken chain of events.

If while at the home you decided that this was the house for you and that you were going to buy it. The unbroken chain of events will have been started by the agent holding the open house. While there is no way to know for sure how an arbitration panel will rule on a matter like this. I have seen panels find an agent to have procurring cause with less.

At the end of the day, nobody knows until you close and there is a challenge to the commission. There is only one way to handle these things to avoid that sort of uncertainty. Have your new agent call the agent that was holding the open house and present the situation. If the open house agent has been around for a couple of years they will realize that a referral fee for their time will more than cut it. If you new agent has been around they will realize the gift they have been given (a client that doesn't want to look at 50+ houses and make 10 offers) and will be more than willing to pay a nominal fee for the commission.

Moral of the story: Don't go to open houses unless you plan to work with the listing agent. While in reality you may be able to get away with it, it just isn't worth the risk.
Web Reference: http://www.campiper.com
0 votes Thank Flag Link Mon Sep 22, 2008
Sorry Mao, it seems like your question is going to be hijacked so that we can all debate procurring cause, "for the good of the consumer," of course :)

Scott and Brian,

Now we are getting into a completely acamedic study of procurring cause (as these normally do), but since we are having the discussion, I can't help but engage.

Could the buyer's agent set up an appointment to show? Yes. Does that make them the procurring cause? No. The facts as presented by Mao were that she went to an open and wanted to write an offer as a result of that open house. The unbroken chain of events that lead to the offer were that she went to the open house. Showing the house later and trying to sneek things buy works most of the time. The other times, the open house agent sitting at the closing table recognizes Mao from her open house and talks to their broker and since the conversation wasn't had up front, their will then be a dispute that could go either way. Nothing you and I decide here will change the fact that the arbtration panel convened will weigh the facts and make a judgement as they see it.

Abandonment is a whole other issue here. The open house agent probably hasn't followed up, but that doesn't change the fact that the chain of events (while rather rare) started and ended with the open house. Mao said that she wanted to write an offer after seeing the home at the open. Abandonment wouldn't really be an issue unless she waits a length of time before writing the offer. If she chooses to write right away, then showing abandoment would be difficult here.

The notion that the listing agent should give up their entitlement to their commission because it would be in their seller's best interest also is a curious one to me. That argument could be carried through to say that agents shouldn't earn a commission at all because it is a barrier to the seller being able to sell their home. After all, in today's market seller's are bringing checks to closing all the time to sell their house and our fees are included. If it isn't a violation of fiduciary duty to earn the listing commission, why would it be a violation to ask for the selling commission if you rightly earned it under the guidelines as set forth by the MLS?

Interesting stuff guys, thanks for the comments.

Cameron Piper
Web Reference: http://www.campiper.com
0 votes Thank Flag Link Mon Sep 22, 2008
yes some agents would be dumb enough to lose a sale to try to keep anyone from taking their money, however with out a buyer there is no sale and therefore no commission, you cant split something that isnt there. how do you think the seller would feel if they knew what was going on. Now as far as commission split and procurring costs. The listing broker may not be the procurring costs if you buyer agent sets up an appointment for you to come back and assists you in putting in an offer. teh listing broker than doesnt have to pay that broker a commission, it is a war they will fight and shouldnt affect you. either way, yes you are in a tough spot. good luck with your purchase
Web Reference: http://www.ScottSellsNH.com
0 votes Thank Flag Link Mon Sep 22, 2008
All very good comments so far that are right on the money. Procuring cause is the unbroken chain of events that leads to the sale of the property.
My question to you is what is the listing agent doing for you? Have they contacted you? Have you responded to the listing agent? How much time has passed since the open house? My point is that there may be a very broken chain of events.
That being said...
The listing agent has a duty to his seller to find a buyer for the property. Your agent should contact the listing agent and show his cards. A Pro will work this out with your agent. Especially since you are ready to walk away. You should not be made to pass the home you want because of a commission split.
You should be commended for your loyalty to your buyer agent! I wish there were more like you.
0 votes Thank Flag Link Mon Sep 22, 2008
Thank you all for your replies.

Cameron - your answer makes the most sense, and that is probably how it will play out.

For those who mentioned it, the agent I've been talking is very qualified and is licensed. Luckily, they are not sugar coating the situation, especially one that may cost them money.
0 votes Thank Flag Link Mon Sep 22, 2008
Unless you signed a consumer notice you should be fine. A consumer notice is required by law for any agent to present and have signed by a potential client PROIR to having any significant conversation about real estate with them. So if you haven't signed it the sellers agent will have a hard time proving she had any conversation with you of merit. She's in the wrong if she did and the real estate commission has ruled in the past that without it the agent cannot prove procuring cause. THIS is what your buyers agent should have been explaining to you.....I suggest if your buyers agent is not an accredited ABR that you find one before pursuing this purchase. You want the best representation possible and I sometimes wonder if you have to come here to ask questions are you sure your have confidence in your agent to begin this process with.
Best of Luck
Web Reference: http://www.dhaleyhomes.com
0 votes Thank Flag Link Mon Sep 22, 2008
Hi Mao,

The answers you have been given seem to be technically correct, but there are local twists to this. In parts of Pennsylvania the listing agents for new home construction announce to other agents that if the agent does not come along with the buyer on the first visit to the community, then the agent for the buyer will not be paid a commission. I don't know that this has been tested in court, but an agent may not want to be the one to make the case. NOT fair, but they get away with it at least sometimes.
As an agent who sells a lot of new construction, I always figure that if I want to be paid for my work I had better get an agency agreement on paper very early in the process. There are some good reasons to have a buyers agent from the get-go, but many buyers still enjoy scouting on their own until they find a home they want to purhcase. I am not sure this is an issue that we will ever completely resolve. (......and like everything else in real estate, while the law may be statewide, local practice may vary!)

I would recommend that you talk to at least a couple of agents before you select a buyers agent, just as you would if you were selecting an agent to list your home. If you have already signed a buyer agency contract, then ask if the two agents have had a conversation about this. Don't assume that the listing agent is holding out for the full commission unless somebody has asked the question.

If you have unanswered questions call the local board of Realtors. They may be able to clarify the issue. .

Eileen's Green Team at Gateway
0 votes Thank Flag Link Mon Sep 22, 2008
Mao - that is how it used to be. Today, in Pennsylvania, there is buyers agency. Buyers agency dictates who would represent you, not procuring cause. Some agents that have been around awhile will refer to the procuring cause but things have changed. You should be fine to have whomever he wish to represent you.

Please visit our site below for more info on buyer agency and more helpful hints.

Good luck !
0 votes Thank Flag Link Mon Sep 22, 2008
Mao - Simply signing the sign in sheet at the open house does not mean that you've entered into an agency agreement with that agent. You're free to go to as many open houses as you like and that should not negatively affect you or your agent. My thought is that you don't have to worry about the procuring cause clause in this case.
0 votes Thank Flag Link Sun Sep 21, 2008
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