Real Estate · License Law Violations and Discipline

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 original listing price rationale
  3. C 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
  4. D The cause of a property defect

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

Practice more questions

This question is from our Real Estate License Practice Tests practice test. Take the full practice test to test your knowledge across all License Law Violations and Discipline and other topics.

Take the Broker (State Law) practice test →

About this topic: License Law Violations and Discipline

License law violations and discipline cover the grounds for discipline, the complaint and hearing process, penalties (fines, suspension, revocation), and the recovery fund. This is one of 20 Broker (State Law) questions on license law violations and discipline, each with a full explanation on a single study page.

New to this exam? Our Real Estate exam guide explains the format, scoring, and how to prepare.

Related questions

State-specific guides

Need information for your state? Our state guides cover local requirements, fees, and what to expect on exam day.