Agency & Procuring Cause – Rebecca Rehberg, Your Partner in Ventura County Real Estate

Agency & Procuring Cause

Agency in Real Estate:  101

When you sit down to discuss listing your home for sale,  you may already have a relationship with a realtor.  On the other hand, if you are getting ready to purchase a home and you do not have a relationship with a realtor, it is important to understand the meaning of "Agency" , or the realtor you work with may be determined for you.

Most potential buyers begin their home search by looking online and are likely using one of the public sites such as Zillow or  And why not?  They are convenient, and they provide a lot of information about the homes you are viewing.

What comes next is can be significant.

If you find a home you would like to see; you can do one of three things. You can call your Realtor, you start looking for one, or you can do the most convenient thing: You can click the button on the site, and one can find you. never know who you'll get and it could be this dude to the right.

If you choose the "click the button" option, there are some important things to know.  First, one of the most common misunderstandings is that these public sites, by default, do not put you in contact with the property's listing agent. Depending upon which site you are using, once you click the button, you will receive one to multiple phone calls from agents who have paid a fee to be able to have a real estate conversation with you.  We are not critiquing the character or qualifications of these agents; it's just the way it works, which is why it can be important to have at least a fundamental understanding of what "agency" is and how it works.

So, let's take a quick look.


Agency is a legal relationship between a principal (client) and an agent (the broker and salesperson) that arises when the principal delegates authority to the agent to perform acts on the principal's behalf and the agent consents to the delegation. In general, an agency agreement should be in the form of a written contract, but this isn't essential unless it is required by state law. —Adapted from the Don't Risk It: A Broker's Guide to Risk Management, 2nd Edition, published by the NATIONAL ASSOCIATION OF REALTORS®.

Seller's agent

Also known as a listing agent, a seller's agent is hired by and represents the seller. A listing contract usually establishes the agency relationship, and under this contract, all fiduciary duties are to the seller. Once a property is listed, the seller's agent's responsibility is to find a buyer or cooperate with another licensee who will attempt to find a suitable buyer for the property.  A seller's agent negotiates the best possible price and terms for the seller and represents the seller's best interest throughout the transaction.

Buyer's agent

A real estate licensee is hired by a prospective buyer as an agent to find an acceptable property for purchase and to negotiate the best possible price and terms. The agent represents the buyer's best interest throughout the transaction. In California, the buyer's agent is generally compensated in a commission split with the seller's agent and paid by the seller.

Dual agency

Dual agency is defined as a relationship in which the brokerage represents both the buyer and the seller in the same real estate transaction. Dual agency is generally considered more advantageous to the seller but not necessarily so with larger brokerages such as ours.  Listing contracts are technically between the broker and the principal, not the agent and the principal.  It is often the case that both the seller's agent and the buyer's agent work under the same broker's license, but as they are independent contractor's it is not difficult for them to maintain their fiduciary responsibilities to their respective clients.  Dual agency is legal in California, even if the seller's agent represents the buyer in the sale, as long as it is properly disclosed.

So what is Procuring Cause, and what does it mean?

In real estate, Procuring Cause defines for real estate agents and buyers, who will receive the commission on a house sale. It is generally in place to protect the buyer's agent's investment of time and money in helping a client to purchase a home.  Procuring Cause is clear to realtors because it is our legal and ethical responsibility to understand it.  But it can be tricky for buyers, and without an understanding, they can stumble into a compromising situation.  Here is the simple version and very common manner of how the Procuring Cause is established. Who first showed you the home that you are buying?

Choosing the right Realtor is essential. Your Realtor will help you determine the value of the home, negotiate your offer and, if accepted, partner with you throughout the escrow and all of its nuances.

Yet, here is an example of how a problem can arise.

You have a cousin Billy who you trust to be your Realtor.  One night you are knocking around on Zillow, you see something you like, you click, and ultimately you meet the Zillow agent at the property.  You decide that you like it enough to make an offer, but you want cousin Billy to represent you. Oops!  That Zillow agent has just established procuring cause (first to show you the home), and now cousin Billy can work with you but, he'll probably have to do it for free.  

If you are not already working with a Realtor, we would be delighted to have the opportunity to speak with you about how we can help you find exactly the home you are looking for.  And by the way.  When we're having a real estate conversation with someone we do not know, we actually appreciate it when they begin with "I have a Realtor".  It doesn't mean the conversation is over, it just alerts us to the fact that we need to maintain some ethical boundaries.