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Commission Dispute? Here’s What You Need to Figure Out

By Jeff Lippman
RE/MAX House of Real Estate
RE/MAX In Motion

If you and another REALTOR® disagree about who earned the commission in a sale, what happens?

If you let it get far enough and cannot come to a conclusion between agents, an arbitration panel will ultimately decide.

And how will they make their decision? They’ll look at who was the procuring cause.

You must first understand what makes someone the procuring cause. NAR defines procuring cause as “the uninterrupted series of causal events which results in the successful transaction.” Let’s take a deeper look and get a better understanding.

Most cases will turn on the following factors:

  • Who first introduced the buyer to the property, and how was the introduction made?
  • Was the series of events starting with the original introduction of the buyer to the property and ending with the sale hindered or interrupted in any way?
  • If there was an interruption or break in the original series of events, how was it caused and by whom?
  • Did the original broker cause the buyer to seek the services of the second broker? For example, if the original broker did not call the buyer for three weeks after a showing, the panel might decide they abandoned the buyer and paved the way for the entry of the second broker.
  • Did the second broker unnecessarily intervene or intrude into an existing relationship between the buyer and the original broker? For example, if the buyer looked at a home with the original broker and the next day wrote an offer through his cousin, the second broker, then the hearing panel might decide that the second broker intervened unnecessarily in the transaction.
  • Did the conduct of the buyer or seller seek to or effectively freeze out the broker?

(NAR provides an extensive list of specific factors to be considered in procuring-cause disputes)

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