Michigan License Law Practice Test

What is the term for when a licensee initiates the chain of events leading to the sale of a property?

1. Procuring cause

2. Listing agreement

3. Agency relationship

4. Real estate transaction

The correct answer is: Procuring cause

The term that describes the situation when a licensee initiates the chain of events leading to the sale of a property is known as "procuring cause." This concept is essential in real estate, as it identifies the broker or agent who is responsible for bringing about the sale of a property. Determining procuring cause can impact commission disputes, as it establishes who is entitled to a commission based on their role in facilitating the transaction. In this context, procuring cause refers to the actions taken by the licensee that directly lead to the buyer's decision to purchase the property. It encompasses the entire chain of events initiated by the licensee that ultimately results in the sale, such as advertising the property, showing it to potential buyers, and successfully negotiating terms between the buyer and seller. Other options like listing agreement, agency relationship, and real estate transaction refer to different aspects of real estate practices but do not specifically capture the idea of an agent's role in initiating a sale. A listing agreement is a contract between a property owner and a real estate agent, establishing the terms under which the agent will sell the property. An agency relationship defines the legal relationship between the agent and their client. A real estate transaction is a broader term that encompasses the buying and