Which term describes the right to compensation for broker involvement in a sale that was initiated by the broker?

Which term describes the right to compensation for broker involvement in a sale that was initiated by the broker?

• A. Procuring Cause
• B. Earnest Money
• C. Title Insurance
• D. Contingency

Answer: (A)

Procuring cause is the idea that a broker earns a commission when their actions start and maintain the chain of events that lead to a sale. If the sale is initiated by the broker and their ongoing efforts bring the buyer and seller to closing, that continuous effort establishes procuring cause and the broker is entitled to compensation under the agency agreement. Earnest money is simply a deposit showing serious intent, Title insurance protects against title defects, and a contingency is a contract condition; none of these describe a broker’s right to a commission for initiating a sale. So procuring cause best describes the scenario.

Procuring cause is the idea that a broker earns a commission when their actions start and maintain the chain of events that lead to a sale. If the sale is initiated by the broker and their ongoing efforts bring the buyer and seller to closing, that continuous effort establishes procuring cause and the broker is entitled to compensation under the agency agreement. Earnest money is simply a deposit showing serious intent, Title insurance protects against title defects, and a contingency is a contract condition; none of these describe a broker’s right to a commission for initiating a sale. So procuring cause best describes the scenario.