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The Legal Blog, brought to you by NVAR's Professional Standards department, helps you stay on top of the latest rules and regulations in the industry.

What is a Sub-Agency?

Sep 20, 2016


Question: What is a Sub-Agency?

Sub-agency is one type of brokerage relationship. Today, everyone is familiar with buyer-agency brokerage relationships in which a buyer is provided with services by the firm that represents the buyer in a real estate transaction. However, veteran agents may remember a time when buyers did not have their own representation. Sub-agency was the predominant method of establishing a brokerage relationship until the mid 1990s.

A sub-agent is a real estate licensee who provides real estate services to a buyer while actually representing the seller in a real estate transaction. A defining characteristic of sub-agency is that a listing firm extends its agency relationship with a seller outside the firm’s own agents and authorizes other cooperating brokerage firms to represent the seller in a transaction. When this happens, the other cooperating broker becomes a “sub-agent” of the listing broker. By extending this agency relationship, the listing firm authorizes the other firm and its agents to represent the seller’s interests in any potential real estate transaction.
  • Agency