What Are Subagents in Real Estate? A Buyers Guide
You found a promising home for sale online. You contact the broker and receive a reply from an agent who provides a showing appointment date and time. But when you arrive, there’s someone else showing you the house. This person may be a subagent.
But what are subagents in real estate? Are they working for you or the seller, and how might a subagent impact your purchase?
In this post, we explain the role of a subagent in real estate, and how there is more than one definition within the industry. Who they work for can make a big difference in your home-buying journey.
What is a traditional subagent in real estate?
If we look through the lens of past housing market models, a subagent is someone who works with a listing agent to help sell a property but does not have a direct contractual relationship with the seller. A subagent can show you the house, but they typically don’t work for you as the buyer; they owe fiduciary duties to the listing broker and the seller.
This allegiance is important to be aware of if you’re working with a traditional subagent. Historically, all agents involved in a real estate transaction represented the interests of the seller, including the subagents.
In today’s real estate playing field, it’s unlikely you will work with a subagent in this sense. If you’re looking to buy a home, you’ll most likely hire a buyer’s agent who works directly for you, not the seller. The primary duty of a buyer’s agent is to find a home that fits your parameters and guide you through all the steps to closing the deal.
Today, the specific duties and loyalties of subagents can vary based on local real estate practices and state laws. Subagency relationships have been made illegal in some states. Later in this post, we’ll look at a more modern definition of a subagent.
What does a traditional subagent do?
The primary role of a traditional subagent is to assist in finding a buyer for the property. They earn a portion of the commission, but they are not the listing agent. Here are some key responsibilities:
Help market the property: Subagents help increase exposure by sharing the listing with potential buyers who might not be reached by the listing agent alone.
Facilitate showings: They arrange visits for interested buyers, providing access and information about the property.
Assist in the selling process: Subagents can help with tasks like presenting offers to the seller and helping during the closing process.
What are these subagents not allowed to do?
Traditional subagents operate under strict guidelines, primarily to protect the interests of the seller, which can limit their interactions with buyers. Here are some key restrictions:
Cannot represent the buyer: Subagents are not allowed to provide advice or negotiate on behalf of the buyer since their loyalty lies with the seller.
Limited confidentiality: They must avoid sharing confidential information from the buyer that could negatively impact the seller.
No disclosure of seller motivations: Subagents cannot disclose reasons why the seller is disposing of the property unless authorized by the seller.
These limitations underscore the importance for buyers to have their own representation in the transaction to protect their interests fully. However, traditional and modern subagents are still bound by the same standards and ethics as all real estate professionals. This means they must:
Be transparent: Subagents are required to disclose their fiduciary duties to you in writing. There should be no question about who they represent.
Obey established laws: As with all real estate agents, subagents must follow the law as established by the state’s real estate commission and other regulatory agencies.
Abide by local Realtor rules: Subagents are also expected to follow rules set by the local board of Realtors. If the subagent is a member of the Nation Association of Realtors, this includes a strict code of ethics.
Maintain confidentiality: Maintaining confidentiality is important for any professional service. It builds trust and avoids conflict with the law.
Example of a traditional subagent in real estate
Molly and Randy are interested in a home listed by a real estate company. They attend an open house hosted by another agent from a different firm, who is cooperating with the listing agent. This agent, who shows you the property, is a subagent.
While the subagent can provide general information about the home, such as square footage and amenities, they cannot advise Molly and Randy on offer strategies or disclose specific details, such as the seller’s urgency to sell.
