Subagent
Definition and meaning of Subagent in real estate.
Subagent is a licensed real estate broker or agent who assists another agent in representing a client in a transaction, typically owing the same fiduciary duties to that client.
In more detail
Historically, in many MLS transactions, any agent working with a buyer who was not the listing agent automatically became a subagent of the seller. Under this rule, even though the subagent worked directly with the buyer, their primary loyalty and legal duty remained with the seller.
This practice has largely been replaced by buyer agency agreements, which establish a direct fiduciary relationship between the buyer and their agent. Today, subagency is rare and has been outlawed or discouraged in many states to prevent consumer confusion.
Key facts
| Category | Buying & Selling |
|---|---|
| Fiduciary duty to | The principal client, usually the seller |
| Availability | Rare today and outlawed in several states |
| Alternative structures | Buyer agency or transactional brokerage |
Under the older subagency rules, the agent showing homes to the buyer was legally a subagent of the seller and had to disclose any financial information the buyer shared to the seller.
Frequently asked questions
Why did subagency become less common in real estate?
Subagency led to confusion because buyers assumed the agent showing them homes was representing their interests, when that agent actually owed loyalty to the seller.
Does a subagent get paid by the buyer?
No, a subagent is typically paid by cooperating in the listing broker's commission split, which is paid from the proceeds of the home sale.