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Subagent is a rare term these days, but it’s smart to know what it is. Bankrate explains.

What is a subagent?

A subagent is a real estate agent or broker who brings in the buyer to purchase a property, but he is not the property’s listing agent. The subagent usually earns a portion of the commission. Subagents are rare today because of the popularity of buyer’s agents and due to liability concerns.

Deeper definition

Subagents work for real estate agents who, in turn, work for real estate brokers. Even though the subagent brings the buyer, he is working for the listing broker and therefore, the seller. In most cases, parties acting as an agent must declare their fiduciary duty in writing.

Subagency is incredibly uncommon these days for a couple of reasons. First, buyers have the option of using a buyer’s agent to represent their interests in a transaction, so they don’t need to engage with a subagent. Second, the listing broker, the seller and the subagent are legally accountable for any mistakes or omissions a subagent makes. Realty agents and brokers don’t want the risk.

Subagent example

Ted wants to buy a home and finds one he likes that is not listed by the agent he is working with. Ted’s agent contacts the listing agent and gets permission to show or sell the house to Ted, thereby making Ted’s agent a subagent. Ted decides to buy the house, and his subagent gets a piece of the commission.

In most cases, subagency is eschewed, if not illegal. Anyone looking for a home should follow the advised channels for representation.

Are you in the market for a new home? Find out what to look for when choosing a real estate agent.

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