• discussions >
• Front Room

Non-Strip Club . . . Procuring Cause . . .

Real estate broker is negotiating with a large land buyer and learns about a block of land it is attempting to acquire. So the real esate broker gets the old thumbs down as far as trying to sell the land of his customer. But, the broker is thrilled to have learned about the block land that is in the process of being acquired. Broker immediately starts getting property records of the area to learn about the ownership. In the block of land one the ownerships isn't related to the others.

Broker contacts the 2 different owners. The first owner basically laughs and says look I know all the interest in my property and don't need any brokers! The second owner is very interested, but doesn't trust the broker. The broker says look I know I can sell your land to this particular big land buyer. You've told me you do NOT think your property is worth more than $900,000. I know that as a broker I can get you $1,0000,000. The owner says I don't want to pay a commission. Broker says I only get paid the sales price over $1,000,000 so you have NOTHING to lose. You don't even think your property is worth over $900,000 and me being the great real estate broker will get you a $1,000,000 all to yourself, and I will get the excess as my commission. :)

The owner agrees and the broker types up a very simple contract. One modification the owner wanted and broker didn't have any problem with was that in order to earn the commission of everything in excess of $1,000,000 the broker must be the "procuring cause" of the sale.

Ultimately, the land sold for $1,250,000 earning the broker a cool $250,000. Unfortunately, the owner learned that the broker had "merely inserted himself" in a purchase chain that had commenced months earlier. The owner believed this was fraud. If the damn broker hadn't inserted himself, then ultimately the large land buyer was going to come knocking on the door anyway. In the owner's mind there was NO way in hell the broker could reasonably be considered the "procuring cause." More like an crooked vulture!



Any opinions? That was the case essentially. :) (My 2 cent opinion--I'm not a lawyer--is that the broker shouldn't have been considered the "procuring cause." He just took advantage of knowing that the large land buyer would be attempting to buy the owner's property and inserted himself in the buying process.)