Effective Cause Of Sale

The effective cause of sale refers to the main reason or factor that directly leads to the successful sale of a property.

What is an effective cause of sale?

The effective cause of sale refers to the main reason or factor that directly leads to the successful sale of a property. In most cases, it would refer to the actions or efforts of the real estate agent, such as the hosting of an open house, that directly led to a successful sale. 

Why is the effective cause of sale important to know? 

The effective cause of sale is crucial in real estate not only for understanding buyer motivations but also for the fair claim of commission by real estate agents. When an agent can clearly demonstrate that their efforts or introductions were the pivotal factor leading to the successful sale, it strengthens their position to rightfully claim commission. 

Consider a scenario where an agent, through their market research and understanding of buyer preferences, identifies a family in need of a larger home due to a growing household. The agent then introduces this family to a property that perfectly suits their needs, leading to a successful sale. In this case, the effective cause of the sale can be attributed to the agent's efforts in recognizing the buyer's specific requirements and steering them towards the right property. 

Who gets the commission if there are multiple agents involved in a sale? 

Commission can sometimes split through agency agreements, which outline how the compensation will be distributed among the involved parties. In typical scenarios, a seller's agent and a buyer's agent, affiliated with different brokerages, agree on a predetermined commission split. 

However, complexities arise when there are multiple agents involved, such as in team transactions or co-brokering arrangements. In these cases, it may become challenging to pinpoint precisely which agent was responsible for securing the sale, making commission distribution less straightforward. 

Factors like dual agency, team dynamics, or the level of involvement can complicate the determination of who contributed most to the successful transaction.

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