Question

N which of the following would a broker be entitled to compensation under procuring cause?

Select one:
a. The client decides to no longer sell the property
b. The client finishes off a transaction after ending the listing contract
c. The client hires a new broker within 1 week who then brings in a buyer
d. The client finds a buyer on their own shortly after the listing contract ends

Answer 1

A broker could be entitled to compensation under procuring cause if they initiated the negotiations with a buyer who ultimately purchased the property after the listing contract ended, as seen in option b.

Step-by-step explanation:

In the context of real estate transactions, a broker would be entitled to compensation under the concept of procuring cause if they can demonstrate that their efforts were the primary reason the sale of the property happened. Specifically, option b, where

'The client finishes off a transaction after ending the listing contract', could potentially warrant compensation for the broker.

This is because if the broker had initiated negotiations with a buyer who ultimately purchased the property, even after the listing contract ended, the broker's initial efforts could be seen as the catalyst that led to the sale, thereby establishing a procuring cause.

However, the specific terms of the broker's contract, local real estate laws, and the circumstances surrounding the conclusion of the broker-client relationship would all factor into whether compensation is actually owed. Clear documentation and communication are critical in these cases to establish the extent of the broker's involvement in procuring the buyer.