Good news, Jay, I’ll take this one for $200.00. I doubt that Laurie Janik is going to respond to you (as – per you – they have “something to hide”):
You’re a riot, Steve. My contract is a proprietary document, built out of years worth of my research, experience and fine tuning. Why don’t you ask Coca Cola to post their secret recipe here? I have no intention of putting it out here for you, and your kind, to copy.
Why don’t you call Laurie Janik, General Counsel of the National Association of Realtors? over at NAR headquarters in Chicago and ask Laurie to do something about me? I am just spoiling to
get this fight into the public eye, so that the abuses endemic with Procuring Cause, the silent theft of home buyer rights,will come to the forefront of consumer consciousness.I have no qualms, whatsoever, about the truth of this situation getting out. Unlike NAR…I have nothing to hide.
The buyer agent document you use is a SECRET that you won’t share with other agents? And you think that you are being ignored by Laurie Janik because “NAR has something to hide”? What a self-important gas bag you are. Please allow me to let a little of the air out. And to answer your burning question, yes Jay, I did Google “procuring cause””reifert”. Anyone who cares to can just hit the hyperlink.
I found your views and attitudes so self centered and oblivious of how the world works (the one everybody else lives in) that – before I reply – I am including your comments on Bloodhound Blog here in their entirety.
Thank you for the kind words, Trevor. The Procuring Cause that is of importance, here, is Realtor? Procuring Cause, hereafter–in this post–PC. Although there is a legal doctrine of procuring cause, that isn’t the breed of which any of us speak, when talking about PC. NAR hands down the guidelines on PC arbitrations, but it is up to each panel–very often composed of hard core PC trappers–to interpret the events which will determine who is actually PC in any given transaction.When buyers had no option of buyer agency…when all agents represented the seller, PC had a valid place in the world of real estate.Now, though, PC steals from buyers and buyer agents and it also steals from sellers and limited service brokers. (The latter is a story for another day, but goes like this–in brief–limited service seller sells property to [he thinks] unfettered buyer. Closing takes place. Agent comes out of nowhere, files PC case against limited service broker. Limited service broker, who had no clue about who had shown the property, loses the PC case and seventeen THOUSAND dollars. Too bad he only collected five hundred dollars in fee income.)
PC is bad for buyers. It is bad for buyer agents. It is bad for sellers, in that licensees may steer buyers away from homes that could generate PC claims. It is bad for limited service brokers.
PC is anticompetitive, in that its nondisclosure keeps buyers from making choices that could have saved them money, if they had only known of the importance of choosing an agent BEFORE they unwittingly obligated themselves.
I have a situation, right now, where a buyer has come to me after having found a home online which she then looked at with the listing agent. She had no idea that she was creating an obligation by meeting with the listing agent. (An agent who owes the seller the duty to seek the highest price at the best possible terms.)
After that viewing, she did what any number of prudent home buyers would do, and began researching process on the internet. As such, she discovered my site, and the concept of exclusive buyer agency.
While I will still offer her representation, subject to her willingness to help me try and break the chain of procuring cause, she stands to lose a couple thousand dollars in benefits I would have offered, had she not been trapped by PC.
Under normal circumstances, I would give this buyer discounts that could come close to two thousand dollars. However, given that I could be brought before a PC panel and lose the entire fee I would earn…I cannot–indeed, will not–give a client monies that would then, if I lost the PC case, come out of my own pocket. (In other words, I’m not going to do all of the important work, take on all the liability and then lose my fee AND give the buyer two thousand of my own dollars, besides.)
So, who potentially loses here? The buyer, who will likely pay more for the property than if I were involved and who loses the benefit of the discounts I would ordinarily provide.
I, of course, as a true buyer agent, lose, too, in that I may not get paid anything for what I do. And, if that happens enough times, then it becomes harder and harder to justify taking the risk.
And this is not an unusual event. It, or similar situations, happens hundreds of times–every day–across the good ol’ USA. It’s just that most licensees benefit from the trap, and therefore figure it all evens out.
Wonder what buyers are going to think, when they finally learn of this nifty little concept. Do you suppose consumer confidence in Realtors? will rise, or fall?
Oh, well…time to give my keyboard a rest. If anyone wants to really jump into the procuring cause thing, go to http://www.google.com and put the following in quotes, just like you see it here: “procuring cause””reifert” . Not all that long ago, I was trying to get my procuring cause brochure to propagate across the usenet archive at Google Groups and ended up getting into some futile, but sometimes interesting, running gun battles with some hard core ordinary real estate agents.Thanks again…Jay Reifert, Broker/Owner
Excel-Exclusive Buyer Agency
Madison, Wisconsin
Procuring Cause WAS a good thing but now it isn’t because buyers are losing out on the remarkable benefits of doing business WITH YOU? You seem to think of NAR as some giant Borg that makes local associations do things that are NAR’s bidding. And the local people who sit on the Procuring Cause panel as “hard core PC trappers” – like they were out to get you. Did it ever occur to you that they are all well-intentioned volunteers who are wanting to make a genuine contribution to the group they are a member of?
The various “rules” that NAR passes and sends to the local and state associations are to promote the general welfare and survival of ALL OF THE MEMBERS. Has NAR done things that I thought were stupid and short-sighted? Sure. Has my local association, Phoenix Association of Realtors done things that I intensely disliked? Again a big YES. What would you think my reaction was when my association did away with recognizing the top producers? I personally got about 80 top Realtors to show up or write letters – we offered to pay for everything. The agents who were most interested in seeing it continue were – like myself – already “retired from competition” (5 consecutive years in the top 1%). I thought it was stupid thing they did and I felt the President, at that time, Fred LaBell was rude and arrogant towards us. But the PAR board members felt that recognizing just those top agents “wasn’t good” for the general membership.
NAR did the same thing. There used to be the TOP 100 Realtors – based on sides and the TOP 100 Realtors – based on volume. Well, there were people who complained and found it “unfair”. So it became the TOP 100 Single Agents and the TOP 100 TEAMS and on and on. Finally, it got to be too much for them to screw with and they did away with it. So I think they were cowards to not stand up to the crybaby agents who complained the “competition wasn’t fair”. Oh well. But I never did think that any of these people had “something to hide”. Nor do I believe they were wanting to be “unfair”. Quite the contrary – they were trying to do (from their viewpoint) everything they could to BE FAIR (to everyone).
The rules that “come down” from NAR are the solutions to the problems that were “sent up” to them by the local associations. Unfortunately for me, my local association isn’t run on the basis of, “What Would Russell Shaw Want Us To Do”. Would I like it if it were? Sure. I personally LIKE my decisions a lot. You are having the same problem: the Wisconsin association and the Madison association isn’t run on the basis of, “What Would Jay Reifert Want Us To Do”.
But in this instance, I would have side with the people you think of as “hard core PC trappers” . The very idea that it would be alright for you (or any agent) to “help someone buy the house” when they already found it without you through another agent seems like a criminal viewpoint to me. If it was you sitting on that Procuring Cause panel – would you vote to reward a poacher? Some other agent got them to the house or showed it to them and now “here is Jay to give them a discount if they would only use him”. What – really – is the difference between that and shoplifting? In both cases you are taking something that does not belong to you. You can say, “Well I am offering the consumer a discount – I’ll give them part of the commission back”. Only it would be a commission you did not earn. If you had your way there would be Realtors running ads that said, “After you find what you want with some other agent, call me and I’ll write it up for you – but I’ll give you some of
the commission back”.
How about the poor “limited service seller sells property to [he thinks] unfettered buyer. Closing takes place. Agent comes out of nowhere, files PC case against limited service broker. Limited service broker, who had no clue about who had shown the property, loses the PC case and seventeen THOUSAND dollars. Too bad he only collected five hundred dollars in fee income.”
What in the hell is that agent doing NOT checking to see how the buyer found out about the house? You seem to think that agent got a raw deal. I don’t. I think they got off easy. If someone called my office and wanted to buy a house (that we had not shown them) the very FIRST question we would ask them is “how did you find out about this property?” If someone wants to play a game – any game – they sure better learn the rules of that game. None of this has anything to do with how much the agent is charging. But that is always the issue the crybaby companies and agents love to bring up – like “traditional agents” are against us because we are taking business away from them because we charge less. Bullshit. Anybody can charge any amount (work for free if they like) they want to on any transaction they desire. They won’t hear any complaints from me about it. And show me some “traditional agent” attacking some agent or company based on “what
they charge” and I’ll go after them. I don’t care what anybody charges. There will always be people charging less than I charge – I have no intention of “beating them on price” or even competing on that basis. But to attempt to set up a business model that is based on STEALING from others and attempting to position it as a “consumer benefit” kind of rubs me the wrong way.
This little jewel of a post (I did use Google, Jay) you had here:
Buyers, though, are screwed over by Procuring Cause, PC, all the time. Here’s how it works: They go out looking at homes,willy nilly, not having any idea that they are creating bligations to any licensees. (The Secret Contract.) They find a house. Then, they begin researching their next steps.As part of their research, they discover buyer agency. Then,they start interviewing buyer agents. Then, they discover that the buyer agents are afraid to touch them, because they have already seen the home they think they want to pursue and the buyer agent doesn’t want to risk losing his/her fee to another licensee who may file a Procuring Cause claim.Hence, the buyer–due to no fault on their own part, as PC has NEVER been disclosed to them–loses their right to representation. It happens all the time. Theft of buyer rights. It’s heinous.
It is heinous, Jay. Unbelievablely heinous that you are openly promoting the idea that it is right to steal from your fellow Realtors. You should consider yourself lucky that Laurie Janik didn’t report you to a really proactive Procuring Cause Panel – one that would come after agents who were intending to rip off others.
Not to worry, it won’t matter now: BloodhoundBlog is here.
Jay Reifert says:
Gee, Russ…that’s a lot of words to say something very simple. Here’s your opinion in a nutshell: Buyers do not have any right to know they are losing their right to representation–at no additional cost in the transaction–by going to see a home with a seller representing licensee.
That’s the crime.
Until buyers are mirandized…letting them know, upfront, before any obligation is secretly created by thieves like you and your ilk, procuring cause has no place in the modern world.
It is about a buyer’s right to representation. It is about a buyer’s right to know that they must do their homework–and decide whether they want representation, and from whom–before they are obligated by thieves like you.
Tell me, Russ, which crime came first? The crime you assert–which is basically helping the buyer to take back their rights–or the original theft perpetrated by good old Realtor? procuring cause? (Them Realtors? are sooooooo ethical. Hey…they gots a code, they must be good peoples!)
But, such disclosure would defeat the purpose of the procuring cause trap, wouldn’t it?
You’re a funny guy, Russ. So funny, I’m very much looking forward to your answer to this question:
Do you believe it is ethically correct that buyers can lose their right to choose an agent, without even knowing that the right was lost?
Time is precious, Russ. Since you like to debate what I’ve said in the past, I’ll see if I can’t find some of my old procuring cause posts, from a variety of sources, for your jousting amusement.
I’d just pick it up fresh with you, but not a word that you’ve said is any different than what has been said dozens of times before, by your trade restraining, non-disclosing, buyer abusing buddies.
Thank you for giving my message play.
Here’s yet another link to one of my procuring cause brochures: http://www.real-reform.org/pc.pdf . Sooner, or later, consumers will know about the trap. When they do, it’s game over for the trappers.
We do agree about one thing, Russ. BloodhoundBlog will help spread the word. Even the power of 1.2 million Realtors?–many of whom would also disagree with your take on PC–does not outweigh the opinion, and power, of +/-300 million Americans.
Thank God for BloodhoundBlog.
Jay Reifert, Broker/Owner
Excel-Exclusive Buyer Agency
Madison, Wisconsin
true-agents@true-agent.com
November 27, 2006 — 6:00 am
Jay Reifert says:
Russ chose to employ a Google link, with regards to my efforts to get my procuring cause brochure to propagate across the internet, that didn’t even show what I had originally posted.
Here’s a link to one of the original postings:
http://tinyurl.com/yhvtvr
Without question, those postings generated a lot of discussion…but not once, not ever, did any licensee who defended procuring cause–and there were many such defenders–speak to the original crime…the theft of the buyer’s right to choose representation.
They always focus the fight on the “poor” seller agent whose commission is being sniped by some interloper.
Well, odds are that no sniping would have occurred, if the buyer knew they were giving away their right to choose representation thanks to the secret concept of procuring cause…as the buyer would likely have stopped to do their homework before going to see any homes.
You hear some agents bemoan the fact that buyers won’t sign buyer agency agreements–their lament, not mine–well, who the hell needs buyer agency agreements when there is procuring cause?
But, that’s the point, isn’t it? Lock ’em down without their knowledge and hope to hell that you don’t run into someone like me, who will fight you over it.
Tell you something else, Russ, if it is an honest PC panel–and that’s the wildcard–I cannot ever LOSE a procuring cause arbitration, because in EVERY instance, there is a DE FACTO device that will break the chain of UNDISCLOSED procuring cause, PC.
I’m about to unveil the secrets to defeating PC. However, that said, good luck finding a PC panel that won’t decide the case on emotion, awarding their seller side compatriots the fee.
With PC, there are two words that come into play–and they are often incorrectly described by those who like to define them: Alienation…and Estrangement A&E. There is also abandonment, but that isn’t at issue here.
Under A&E, the licensee has done something to convince the buyer that s/he can no longer trust the licensee. Well, what provide more evidence of a licensee’s untrustworthiness, than the licensee stealing away the buyer’s right to representation, without their knowledge?
Nothing. (Although it does help when the licensee has also not disclosed agency at the proper time, as that is usually violation of a state law, another possible route to A&E.)
For a buyer who is thusly trapped, the question has to arise in the mind, “Seeing that this licensee had no qualms about trapping me with PC, what is going to happen the next time that their interests are in conflict with mine?”
Once the buyer comes to that honest conclusion–no matter how derived–the chain of procuring cause is irrevocably broken. Irrevocably.
Do not let it be lost on you that A&E is not a maybe in breaking the chain. If it is found, and once the rationale above is set forth, it cannot help but be found, it is game over for the trapper.
Again, though, good luck finding a panel that will set aside their seller agency bias in rendering the proper judgment.
The sad thing is…NONE OF THIS SHOULD BE HAPPENING IN THE FIRST PLACE. The only HONEST thing to do…the only ETHICAL thing to do, is for licensees to DISCLOSE, UP FRONT, that procuring cause exists, what the TRUE impact of it is, and therefore give the buyer a chance to opt to avoid the obligation.
Once that happens, my number one argument with NAR will be over.
PS: Just so Russ doesn’t get the wrong idea…I have NEVER been taken before a procuring cause panel. What’s more, I suspect that if I were…I would win, because I won’t take on any buyer as a client who knew–in advance of going to see the subject property–that procuring cause existed and the ramifications thereof. So long as they didn’t know of the trap, and are angry at the theft of their rights, I will take them as clients and run the risk of getting a panel that wants to make legal history. (Because if they don’t decide it correctly, we go from Kangaroo Court, to real court.)
Sometimes, I wonder if it wouldn’t be possible to attack NAR under RICO, the federal racketeering statute. PC would be one prong, but my understanding is that there needs to be another prong, too. Of course, if NAR would just wake the hell up…then such thoughts wouldn’t be necessary.
Jay Reifert, Broker/Owner
Excel-Exclusive Buyer Agency
Madison, Wisconsin
true-agents@true-agent.com
November 27, 2006 — 7:12 am
Jay Reifert says:
Just to put it out there, it would seem to me that limited service brokers are the ones that would have the best ability to go after NAR on grounds of racketeering, under the federal RICO statute.
In some states, limited service brokers have not only been abused by undisclosed procuring cause…but they have also been abused by MLS policies that have been created, arguably, to restrain their trade.
Maybe that’s the ticket for forcing NAR to reform its trade-restraining policies.
What do you think, Russ? As one of the most vocal cheerleaders for the forces of trade restraint, you must have an opinion…
Here’s a link to some RICO information:
http://www.ricoact.com/ricoact/faq.asp#remedies
Jay Reifert, Broker/Owner
Excel-Exclusive Buyer Agency
Madison, Wisconsin
true-agents@true-agent.com
November 27, 2006 — 7:30 am
Agusto says:
When the Phoenix market was hot I came across sellers agent that told my borrower that she would not be presenting offers to her client from buyers that did not have buyers representation. I spoke to the realtor and reminded her that it was her fiduciary responsibility to present all offers to her client and she still refused. Can someone explain to me me why this realtor did that. Was she attemting to create a PC? The offer that was presented was 3% below listed price.
November 27, 2006 — 11:07 am
Jay Reifert says:
By the way, Russ…you can hold off on doing any more little “superior dances” because of your ability to put neat little things in your posts.
Although I happen to bit a bit rusty on my html coding, it only took a few minutes–coupled with the desire–to brush up on what I needed in order to do the same.
Here’s something interesting to commemorate our first little tussle.
Best wishes on your recovery. In the future, you might want to avoid leading with your chin. 😉
Jay Reifert, Broker/Owner
Excel-Exclusive Buyer Agency
Madison, Wisconsin
true-agents@true-agent.com
November 27, 2006 — 6:02 pm
Jay Reifert says:
Agusto asked whether Procuring Cause, PC, might have been at the root of a particular licensee’s failure to present an offer drafted by a subagent from another firm, to her seller.
My thought, based on the information you’ve provided, is that PC is not likely at the heart of this situation.
I find it more likely that this licensee’s firm has a policy of not allowing subagency–for liability reasons–on any of its listings.
So long as this was explained to, and agreed to, by the seller, I don’t see that there would have been a violation of fiduciary duty, though I would wonder how this refusal would play if the state in question had a statute requiring presentation of all offers…
Something I do find problematic, though, is the notion that forcing other licensees to claim to be buyer agents, does not make them qualified to be buyer agents. True buyer agency is about how the buyer agent acts, and does not merely arise by forced to call oneself a buyer’s agent.
Moreover, if the state in question requires buyer agency relationships to be in writing, as does–for instance–Wisconsin, this might just generate a problem, if the buyer does not wish to sign a buyer agency agreement.
What does the buyer do, then? Use the listing agent in order to purchase the home? If that was the case, then maybe the refusal is, legal or not, calculated to drive the buyer out of the arms of one licensee and into another.
If so, though, then procuring cause ought to protect the licensee whose offer was not presented, as procuring cause isn’t–as NAR loves to say–dependent on agency relationships. Agency is only one factor among many.
Of course, none of that changes the fact that undisclosed PC is an evil, unethical, trade-restraining device.
Jay Reifert, Broker/Owner
Excel-Exclusive Buyer Agency
Madison, Wisconsin
true-agents@true-agent.com
http://www.real-reform.org/pc.pdf
November 27, 2006 — 6:22 pm
Kevin Boer says:
Jay, I was beginning to go through your arguments (and the counterarguments) about procuring cause etc. Some thoughts on the contract you propose buyers should carry with them and get Realtors to sign:
1) If a person came into an open house and asked me to sign that contract, my response would have to be, “I’m going to have to check with my attorney first.” Regardless of what potential good there may or may not be in that contract for me, the visitor, the real estate industry, or the whole universe for that matter, I’m not signing a document with which I’m not familiar!
2) The attorney who drafted that agreement is none other than David Barry. The agreement, and unfortunately by extension your whole argument, is therefore comical at best and suspect at worst, at least here in California where David Barry fires off at least one frivolous anti-real-estate industry per year. I just can’t take anything too seriously if David Barry has a hand in it.
Advice:
1) Hire a more credible attorney.
2) Don’t propose that people walk around with an agreement that Realtors simply won’t sign — not because we don’t agree with what’s in it, but because we don’t know what’s in it.
November 29, 2006 — 12:39 am
Jay Reifert says:
Gee Kevin, why do you suppose NAR–and its subentities–are getting sued so much, of late, over antitrust issues? You are aware that the USDOJ has sued NAR on antitrust grounds, too, aren’t you?
David Barry and Jay Reifert happen to have much closer connections than that brilliantly simple Procuring Cause form.
As for you Realtors? not signing things because you don’t know what’s in it, perhaps you can start by reading it. It’s crystal clear. I think most consumers would find your arguments amusing, in light of the documents which folk like you put before them, and expect them to sign/initial.
I’m not looking for you, or any other Realtor? to approve of my plans. Oh, sure, I’m hoping that other licensees who respect a buyer’s right to avoid the trap will step up and help me expose the theft inherent in Procuring Cause…but this is really about going over your collective Realtor? heads, direct to the consumers. Once they get it…it’s game over for the abusive aspects of Procuring Cause.
Just look at Page 4, Verifying that Procuring Cause Exists, from the brochure. That’s the whole premise of the brochure and the form. Proving to consumers that procuring cause exists. I don’t care if any Realtor? ever signs the form, so long as the consumer gets the point that the trap exists, and then stops to research their options, before the obligation is created.
Jay Reifert, Broker/Owner —> Hostage Realtor?
Excel-Exclusive Buyer Agency
Madison, Wisconsin
true-agents@true-agent.com
November 29, 2006 — 8:40 am
Jay Reifert says:
Hey…speaking of that USDOJ antitrust suit against NAR, here’s an update.
Seems the judge isn’t ready to concede that NAR is innocent, contrary to NAR’s mighty protestations.
Hey Greg! Since I can’t get so much as an acknowledgment by email, I’ll make it known out here: I’m interested in being elevated to the status of a Bloodhound Blog Contributor.
You give me a greater voice, and I’ll help your blog bridge the universes between the consumer and the practitioner. (And if Russ can keep from calling me a “Gas Bag” too often, we should be able to maintain civility, besides.)
If that doesn’t fit your gameplan, I’m content to just make my comments from the sidelines presuming you don’t pull the plug on my ability to post…
Jay Reifert, Broker/Owner
Excel-Exclusive Buyer Agency
Madison, Wisconsin
true-agents@true-agent.com
November 29, 2006 — 9:08 am
Kevin Boer says:
Jay,
I had no idea you and David Barry were practically Siamese Twins. Here’s my problem with David Barry, and by extension perhaps you as well, though the jury is still out on that one since I don’t know as much about you: For every great idea he has to reform real estate for the benefit of the consumer, he has five others that are patently nonsensical. Last year he tried to go against Natural Hazard Disclosure Companies on the grounds that they issued many reports with false information, resulting in buyers purchasing homes that were, for instance, actually in high-hazard seismic zones, thinking they weren’t.
Unfortunately for him, he wasn’t able to produce a single defendant to whom this had actually happened, and my understanding is the case was thrown out.
I tend to discount any initiative he’s involved in simply because so many of them are frivolous. It’s a shame, really, because it’s quite possible some of his ideas are actually pretty darn good. By extension, it’s possible your campaign on procuring cause may indeed be a pretty darn good one, but if David Barry’s name is associated, I’m immediately skeptical.
Regarding the actual content of your arguments re. procuring cause, I think you have some very good and valid points. Tons of unattached buyers are indeed going out on their own to view properties and potentially creating procuring cause issues for themselves, so some more upfront disclosures for them would probably be a good thing. And since unattached buyers by definition have not yet had a “Real Estate 101” tutorial by a Realtor, perhaps the only way for them to become aware of it is through an Internet campaign.
Regarding your other point — that Realtors shove a stack of documents in front of their clients and expect them to sign it — I’m in complete agreement. With each new stack of docs for my clients, I do my best to give them 24 hours to read through them before getting their signatures, and before writing up the first offer, I spend a good two hours with my clients going over the nitty-gritty details of the purchase contract.
November 29, 2006 — 7:00 pm