The hearing panel will consider whether the issue even qualifies to be decided through arbitration and if the correct parties are named. It’s possible, however, for a separate agreement to entitle you to receive compensation directly from a consumer. Simply having a single-agent exclusive agreement with a consumer won’t guarantee that you’re the procuring cause of a sale. This means that prior cases have no impact on the outcome of your case, as the hearing panel doesn’t take them into account when reviewing your case.Īgency relationships don’t determine whether you’re entitled to compensation. Prior cases have no impact on your case.Įach arbitration hearing is unique, and all decisions are based on the facts and circumstances presented by the parties and their witnesses. This list is not all-inclusive, but it does delve into the depths of a transaction to help establish factual information.ġ. NAR has listed six suggested factors for determining procuring cause. Factors that determine compensationĪppendix II to Part 10 of the NAR “2009 Code of Ethics and Arbitration Manual” explains the various elements of procuring cause as they apply to commission disputes, including the terms of the listing contract, any compensation offered by the listing broker to cooperating brokers (through the MLS or otherwise) and the terms of the purchase contract. When there’s a dispute among Realtors, procuring cause is determined by applying the factors established by the National Association of Realtors (NAR) to the situation in question.Ī hearing panel is charged with analyzing the information in order to demonstrate that the efforts of a specific broker were responsible for the buyer’s decision to buy the property and resulted in a successful transaction without any break or interruption. Many factors may impact aĭetermination of procuring cause, but no single factor in itself determines the outcome. Whether a specific broker is the procuring cause of a sale is determined on a case-by-case basis. When listing brokers place an offer of compensation in the MLS and a competing broker procures a buyer to complete a successful real estate transaction, a contract is formed. In doing so, most properties are sold cooperatively through a Multiple Listing Service (MLS) with an offer of compensation to other participants. Real estate is unique in that Realtors begin each day with the intent to cooperate with their direct competitors. Rather, it varies depending on the facts and circumstances of each transaction. Unfortunately, there are no black-and-white rules on what constitutes procuring cause and exactly what a broker must do to achieve it. But one thing that remains the same is the standard of compensation, also known as "procuring cause."
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