What is a Subagent in Real Estate and How Does it Work?

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|10 min read

Those looking to buy a home often turn to a buyer’s agent to act as a single agent on their behalf when going through the home buying process. But, sometimes, someone that is not connected to the seller’s agent may bring an offer to the table. This person is called a subagent, and they work with the seller’s agent (and the agent’s brokerage) on behalf of the seller.

In this article, we’re going to explore everything you need to know about what a subagent does, their responsibilities, limitations, and more.

What is a Subagent?

A subagent is defined as “a real estate Broker or salesperson who, with the consent of the listing broker, acts for the seller and brings in a buyer in a transaction.” In other words, they are an extension of the seller’s agent and work to get the best possible deal for the seller while following all the rules and regulations set by the state in which they are operating.

In some ways, a subagent is very similar to a dual agent or designated agency, but there are some key differences in not only how the deal is commenced, but also in the duties and responsibilities a subagent has to each party in the transaction.

The subagent’s primary duty is to the seller, not the buyer. It’s important to remember this when working with a subagent because their loyalty lies with the person who is paying them, not the person who is looking to buy a home.

That said, subagents are bound by the same rules of ethics as all other real estate agents. This means they must:

  • Disclose their fiduciary duties in writing
  • Operate within the confines of the law
  • Treat all parties fairly and equally
  • Respect confidential information
  • Be honest in their dealings

What Does a Subagent Do?

A subagent’s role is to bring in potential buyers. Subagents are actually much less common these days as most buyers prefer to work with a single agent who has their best interests at heart. Additionally, many types of former subagency relationships have been made illegal in numerous states due to the fact that buyers were often unaware that the subagent was acting on behalf of the seller, not the buyer in the transaction.

That said, there are still situations where a subagent may be involved. For example, if a buyer is working with an agent, but also looking for properties on their own, the buyer may contact the listing agent of a property they like to find out more about it.

Because the buyer found the home they now want to purchase without the help of their agent, the listing agent may ask the buyer’s agent if they would be willing to act as a subagent.

If the buyer’s agent agrees to act as a subagent, they must disclose this relationship to both parties and get written consent from all involved. This is important because it ensures that everyone is aware of the situation and no one feels like they are being taken advantage of.

Subagent Responsibilities

A subagent is responsible for finding potential buyers and negotiating on behalf of the seller. They are also responsible for adhering to all state laws and regulations regarding real estate transactions as well as any rules set forth by the seller or their agent.

Subagents must also disclose their fiduciary duties to all parties involved in the transaction and treat everyone fairly and equally. Additionally, they must respect confidential information and be honest in all of their dealings.

Subagent Limitations

A subagent is limited in the type of information they can share with potential buyers. For example, they cannot disclose anything about the seller that would give the buyer an advantage in negotiations or anything that would put the seller at a disadvantage. Additionally, they cannot steer buyers towards or away from certain properties based on their own interests.

Additionally, subagents are not allowed to enter into exclusive agreements with either the buyer or the seller. This means they cannot represent both parties in a transaction or have any sort of loyalty to one party over the other. Their only loyalty is to the seller and their goal is to get the best possible deal for them.

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