Real Estate · General

What is 'procuring cause' and why does it matter for commission disputes?

Correct answer

The chain of events initiated by a broker that was the predominant factor in bringing about the sale — determining procuring cause is how disputes between competing brokers over commission entitlement are resolved

  1. A The reason a contract was cancelled
  2. B The chain of events initiated by a broker that was the predominant factor in bringing about the sale — determining procuring cause is how disputes between competing brokers over commission entitlement are resolved
  3. C The cause of a property defect
  4. D The original listing price rationale

Why this is the answer

PROCURING CAUSE determines which broker is entitled to a co-op commission when multiple brokers were involved in a transaction. The NAR arbitration process uses procuring cause when a dispute arises. Key factors in procuring cause determination: who first introduced the buyer to the property; who maintained an uninterrupted series of events leading to the sale; was there a break in representation? Did the buyer work with another broker in between? Typical scenario: Buyer sees home at open house with Broker A, then contacts Broker B and writes an offer with them. Broker A claims procuring cause (they showed it first); Broker B claims it (they wrote the offer). NAR arbitrators weigh all circumstances. Brokers must document all buyer contacts to protect their procuring cause position.
Source: Real Estate State Exam, Procuring Cause

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