Procuring Cause Issue

[curiousonetwo]

What is the name of your state?VA

Have a difficult situation I would like advice about. Husband and I decided to sell house ourselves and determined that we would offer people a $10,000 fee for a full price contract. Husband told Neighbor A that we would pay $10,000 if a purchaser was found for a full price contract. Neighbor A told Neighbor B. Neighbor B told Neighbor C that we were offering $10,000 to anyone who procured a purchaser for our house. Neighbor C immediately called around. Neighbor C called us and told Buyer A would be calling. Buyer A called within the hour and we set up a time for them to see the house. Buyer A saw the house, liked it and offered to make a bid. Husband called Neighbor C and told them that we had an interested buyer and we would pay the commission. As a result of negotiations, Buyer A agreed to pay $5,000 below our asking price in exchange for letting us stay for free one month after we settled. Husband called Neighbor C and told them the contract wasn't full price but that we wanted to offer them $1,000 for their efforts. Neighbor C said he never knew about the "full price contract" clause. At closing, a check was written out of proceeds for $1,000 and husband offered to Neighbor C who reluctantly took it. Neighbor C signed a receipt which indicated that this was in payment of any and all commissions/fees. Now we get a letter from Neighbor C's attorney citing "procuring cause" and stating that Neighbor C was acting as our broker according to our offer.

A few points about Neighbor C: there was never a written contract between us; they heard about the offer at least second hand; they never called us to clarify any terms; they claim they made monetary commitments based on their expected fee; they simply made a telephone call - there was no other involvement.

From doing some research online, I understand that procuding cause involves more than merely making a call that there has to be "ongoing negotiations".

What is everyone's take on this issue? These people never clarified any terms and, technically, the offer wasn't even made to them.

[HomeGuru]

Originally Posted by curiousonetwo

What is the name of your state?VA

Have a difficult situation I would like advice about. Husband and I decided to sell house ourselves and determined that we would offer people a $10,000 fee for a full price contract. Husband told Neighbor A that we would pay $10,000 if a purchaser was found for a full price contract. Neighbor A told Neighbor B. Neighbor B told Neighbor C that we were offering $10,000 to anyone who procured a purchaser for our house. Neighbor C immediately called around. Neighbor C called us and told Buyer A would be calling. Buyer A called within the hour and we set up a time for them to see the house. Buyer A saw the house, liked it and offered to make a bid. Husband called Neighbor C and told them that we had an interested buyer and we would pay the commission. As a result of negotiations, Buyer A agreed to pay $5,000 below our asking price in exchange for letting us stay for free one month after we settled. Husband called Neighbor C and told them the contract wasn't full price but that we wanted to offer them $1,000 for their efforts. Neighbor C said he never knew about the "full price contract" clause. At closing, a check was written out of proceeds for $1,000 and husband offered to Neighbor C who reluctantly took it. Neighbor C signed a receipt which indicated that this was in payment of any and all commissions/fees. Now we get a letter from Neighbor C's attorney citing "procuring cause" and stating that Neighbor C was acting as our broker according to our offer.

A few points about Neighbor C: there was never a written contract between us; they heard about the offer at least second hand; they never called us to clarify any terms; they claim they made monetary commitments based on their expected fee; they simply made a telephone call - there was no other involvement.

From doing some research online, I understand that procuding cause involves more than merely making a call that there has to be "ongoing negotiations".

What is everyone's take on this issue? These people never clarified any terms and, technically, the offer wasn't even made to them.

**A: I see many problems. First, you owe the commission not based totally on the procurring cause theory, but simpy as a finder's fee.
Second, there is a hint of evading real estate licensing requirements.
Your fsbo wheeling and dealing will get you in a lot of trouble. Cool it.

[curiousonetwo]

What do you mean by "evading real estate licensing requirements?"

[walllh]

Personally I feel they have to prove their case. The burden of proof is on them. What they will have is proof that someone told them $10,000 was for finding a buyer. But that person was told that it was only for someone who could get full price. This is a classic case where the data gets blurred from one person to the next. if you can get the first person you told to say that the $10,000 pay out would be for only someone who was able to find a buyer who would buy at full price then I would feel you the court should be a little in your favor. Also, you showed some honor by paying them the $1,000. I think once they accepted that check, and if they cashed it, that they are paid in full and should be happy with that. The law has got to be able to protect you some how.

Also, i understand that practicing real estate without a license can burn you but this was your own house that you were selling. You have the right to sell it by owner if you want. I think what may happen if that at the most the court will order the paying of the full difference which would be $5,000. And if you get a lawyer you may have that cost plus court cost, and maybe even the other person lawyer fees.

[BradleyS]

HG......I did the research**************YOU ARE ABSOLUTELY RIGHT**************.almost identical to KS Law......

Virginia Statute**************

§30-40-3. License required.
It shall be unlawful for any person to engage in or carry on, directly or indirectly, orto advertise or hold himself or herself out as engaging in or carrying on the business or act in the capacity of a real estate broker, associate broker or salesperson within this state without first obtaining a license as provided for in this article.
§30-40-4. Definitions**************..

(2) Directs or assists in the procuring of a prospect calculated or intended to result in a real estate transaction;.....there's plenty more....

REAL ESTATE is not a "Bird Doggin" Business**************..there are laws that need to be followed to protect BOTH Principals in the transaction.....

Additionally......the recipient of the "Referral" Commission would be breaking the law as well...