PSI New Jersey Real Estate State Practice Exam

Who must be the procuring cause of a sale to collect a commission?

1. The seller of the property

2. The broker or one of their licensees

3. The appraisal service that values the home

4. The previous owner of the property

The correct answer is: The broker or one of their licensees

To collect a commission in a real estate transaction, the broker or one of their licensees must be the procuring cause of the sale. The term "procuring cause" refers to the person or entity that is primarily responsible for bringing about a sale or for finding a buyer for a property. In real estate, this typically means that the broker or their designated agents were actively involved in the transaction, such as facilitating showings, negotiations, or effectively marketing the property. The relationship between the broker and the seller often formalizes this through a listing agreement, which outlines the obligations and expectations regarding commission. If a broker can demonstrate that their efforts led to a successful sale, they are generally entitled to receive a commission based on the agreement in place. Other options do not align with the responsibilities related to collecting a commission. The seller is primarily focused on managing their property and may not be involved in the sale process beyond accepting an offer. An appraisal service plays a role in determining the value of a home to help set the price but does not directly participate in the transaction process. The previous owner, while foundational to the property’s history, does not have a current stake in the sale after ownership has transferred, nor do they have a claim to the commission