“Procuring cause….Who’s going to get paid”
Don’t miss this informative session! Learn about procuring cause and how to protect your commissions.
Below is a sample case that will be answered on Tuesday. What’s your answer?
On January 1, 2012 Joe Broker took an exclusive listing on a 20,000sf Warehouse at 123 Jericho Tpke, Syosset. As
per the seller’s instructions Joe placed the property on the Multiple Listing Service, and placed a sign on the building.
Joe offered compensation to brokers agents and buyers agents. Joe listed the property for $850,000, and he had the
survey, and all specs available for any buyers and/or brokers interested in the property.
On February 15, 2012 Joe Broker received a call from Bob Buyer. Bob said that he needed warehouse space for
storage for his expanding business, and he saw Bob’s sign at 123 Jericho Tpke. He thought it would be the perfect
location because of the proximity to highways. Joe Broker made an appointment to meet Bob Buyer at the property
on February 17, 2012 at 8am.
On February 17, 2012 Joe and Bob met at the warehouse. Joe Broker asked Bob Buyer if he had any exclusive relationship
with a broker. Bob said he did not. Joe Broker spent about two hours going through the property with
Bob. Joe provided to Bob the package he prepared for the property with all detailed information. Bob Buyer said
that part of his business would require him to store helium tanks in a small portion of the warehouse, and he asked
Bob if there were any restrictions on this. Joe Broker told Bob that he would investigate this and get back to him later
that day.
Later in the day on February 17, 2012 Joe Broker spoke to Bob Buyer and told him that as long as he had the proper
licenses to store helium tanks there would not be any problems on this property. Bob thanked Joe, and told Joe he
would be in touch. On February 18, 2012 Joe Broker left a message for Bob Buyer to see if he had any other questions
regarding the property. He did not hear back from Bob Buyer.
On February 19, 2012, Joe Broker receives a call from Amy Broker at 10am. Amy told Joe Broker that she has a
buyer client interested in purchasing the property at 123 Jericho Tpke. She said that she would be putting together
an offer with her client, and she would get back to Joe. That afternoon Amy Broker called Joe Broker with an all cash
offer for $825,000 with a closing in 30 days. Price and terms were presented to the seller, and the seller agreed on
taking the offer.
Joe Broker asked Amy Broker to forward to him the buyer and attorney information. She sent the information with
ABC Corporation as the purchaser. The transaction goes smoothly into contract.
On March 15, 2012 the closing is scheduled for 9am. When Joe Broker walks into the closing room he is shocked to
see Amy Broker sitting there with Bob Buyer. Joe Broker immediately tells Amy and the attorneys that he had introduced
Bob Buyer to the property and spent a lot of time with him and provided all the necessary information. Amy
Broker states that she has a contract with her buyer client and is entitled to the commission.
Both brokers agree that they do not want this issue to interfere with the closing, and they agree to put the selling side
of the commission in escrow at LIBOR. Who do you think is the procuring cause and why?
RSVP: http://www.mlsli.com/chapterreg/meetings.asp
LICN Networking Breakfast: Tuesday April 24, 2012 8:00-10:00
On Parade Diner, 7980 Jericho Tpke., Woodbury, NY 11797
Guest Speaker: Linda Bonarelli Lugo, 2012 MLS President
“Procuring cause….Who’s going to get paid”
Don’t miss this informative session! Learn about procuring cause and how to protect your commissions.
Below is a sample case that will be answered on Tuesday. What’s your answer?