Code of Ethics Fallacy

April 1, 2008

Common misconceptions about NAR’s Code of Ethics can lead to unnecessary disputes with fellow practitioners.

Example: procuring cause.

Misunderstanding: Showing a property proves procuring cause and entitles you to a commission if your buyer purchases the home.

The real story: Procuring cause is a complex issue, and no one action ensures that you’re entitled to compensation after a sale. Appendix II to Part 10 of the Code of Ethics and Arbitration Manual gives a basic definition of procuring cause as “the uninterrupted series of causal events which results in the successful transaction.” Neither showing the property nor having a buyer’s representation agreement with the purchaser automatically demonstrates procuring cause.