AgencyIntermediateCalifornia Exam

The 'procuring cause' doctrine in real estate determines:

AWho holds the seller's earnest money, consistent with typical listing agreement terms
BWhich broker is entitled to a commission by identifying who set in motion the chain of events leading to a saleCorrect
CWhich agent must disclose material defects, per standard fiduciary practice in the industry
DHow commissions are taxed, under standard California agency practice

Why Which broker is entitled to a commission by identifying who set in motion the chain of events leading to a sale Is Correct

Answer B: Which broker is entitled to a commission by identifying who set in motion the chain of events leading to a sale

The procuring cause doctrine determines which broker earned a commission by identifying the agent who set in motion the uninterrupted series of events that led to the sale. It is used to resolve commission disputes between competing brokers.

Exam Tip: Agency

Agency questions are among the most tested on the exam. Focus on the difference between client and customer, and memorize the fiduciary duties (OLD CAR). Watch for questions that try to blur the line between a general agent and a special agent.

Key Agency Terms in This Question

Agency

A legal relationship in which a licensee (agent) acts on behalf of a principal (buyer or seller) in a real estate transaction.

Listing Agreement

A contract between a property owner and a real estate broker that authorizes the broker to market and sell the property.

Earnest Money

A deposit made by the buyer when submitting a purchase offer, demonstrating serious intent and serving as consideration for the contract.

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