Subagency
Definition
A relationship where a listing broker authorizes other brokers to act as agents of the seller, extending the seller's agency relationship to cooperating brokers.
Example
Under the old MLS model, Agent A lists a property and Agent B shows it to a buyer. Agent B was technically a subagent of the seller, meaning Agent B owed duties to the SELLER, not the buyer — even though the buyer thought Agent B was "their" agent.
Exam Tip
Subagency is mostly historical but still tested. The key point: a subagent owes duties to the SELLER through the listing broker, NOT to the buyer. This is why buyer agency agreements became important — to ensure buyers have their own representation.
Related Agency Terms
Agency Relationship
A legal relationship in which one person (the agent) is authorized to act on behalf of another person (the principal) in business transactions with third parties.
Fiduciary Duty
The highest legal obligation of trust and confidence owed by an agent to their principal, requiring the agent to act solely in the principal's best interest.
Dual Agency
A situation where a single agent or brokerage represents both the buyer and the seller in the same real estate transaction.
Designated Agency
An arrangement where a brokerage assigns separate agents within the firm to represent the buyer and seller in the same transaction, allowing each client to have dedicated representation.
Transaction Brokerage
A non-agency relationship where the broker facilitates a real estate transaction without representing either party, owing limited duties of honesty, fairness, and competence to both.
Agency by Estoppel
An agency relationship created when a principal's actions or words lead a third party to reasonably believe that an agent has authority, and the principal fails to correct this belief.
Frequently Asked Questions
Test Your Agency Knowledge
Practice with exam-style questions to make sure you can apply Subagency and other agency concepts.