Ask Elliott #50: Who is the procuring cause?

The situation is that a listing agent introduced a property to a client at an open house they were holding. The listing agent has a substantial email trail proving that they introduced the property to the client and had built and maintained a relationship with the client. This relationship went on for some time and many discussions, including pointing the client in the right direction to get their financials together. When the discussion of disclosed dual agency came up, the client suddenly had a "friend" in real estate and went to this "friend", who was out of the country while the listing agent introduced the property to the client, to write up the contract. It turns out that the "friend" had never shown the client any other properties and, to the best of my understanding, was not working with them. The listing broker and supposed broker for the "friend's" company had a verbal agreement that the selling end of the commission would be split equally. It turned out that the supposed broker was not the actual broker for the other company. When the actual broker found out about the situation, the equal split agreement was taken off the table and they demanded the full commission. In the best interest of the client, the listing agent and broker allowed the deal to close and kept the selling end of the commission in escrow until this dispute was settled. Now the other broker wants to arbitrate the remainder of the commission. My question is, when the arbitration board reviews a commission dispute, which is more important; who procured cause for the sale or who actually wrote up the contract?

Category:

Education

Tags:

• Ask Elliott
• Caplan School of Real Estate
• Caplan School
• Agency
• Real estate commission rules
• New Jersey real estate laws
• commission disputes
• specific performance
• educational