National Real Estate Exam (PSI)General Principles of AgencyHard
A buyer works with Agent A over several weeks, viewing multiple homes and receiving substantial guidance, but never signs a buyer representation agreement. The buyer then contacts Agent B directly, tours a home with Agent B, and ultimately submits an offer through Agent B that is accepted. Agent A claims to be the procuring cause of the sale and demands a commission. Which factor is MOST important in determining whether Agent A is entitled to a commission?
- AWhether Agent A's uninterrupted efforts were the direct cause that led to the buyer's ultimate purchase
- BWhether Agent A is licensed with the same brokerage as Agent B
- CWhether Agent A had a signed exclusive buyer agency agreement at the time
- DWhether Agent A spent more total hours with the buyer than Agent B did
Show answer & explanationAnswer & explanation
Correct answer: A. Whether Agent A's uninterrupted efforts were the direct cause that led to the buyer's ultimate purchase
Procuring cause is determined by whether an agent's efforts started an uninterrupted chain of events that directly led to the successful transaction. Simply spending more time or being licensed with the same firm does not establish procuring cause; the key is whether the causal link between the agent's efforts and the final sale remained unbroken.
Why the other options are wrong
- B. Brokerage affiliation is not the deciding factor in a procuring cause dispute.
- C. A signed agreement is not required to claim procuring cause, though it strengthens a claim; the causal link is the deciding factor.
- D. Hours spent alone does not determine procuring cause if the chain of causation was broken.
Procuring Cause
The agent whose uninterrupted efforts are the direct cause of a completed sale is generally entitled to the commission in a procuring cause dispute.
- Common issue in commission disputes between cooperating agents
- Focuses on unbroken chain of causation, not just first contact
- Often resolved through arbitration at local real estate boards
Memory trick: Procuring cause: follow the unbroken chain to the sale.