Subagency in real estate is an arrangement where the agent helping a buyer tour and consider homes legally represents the seller, not the buyer. For decades this was the default in residential sales: every licensed agent in the deal owed loyalty to the seller, including the one driving the buyer around. The model has nearly vanished since the August 2024 National Association of Realtors settlement cut off the Multiple Listing Service mechanism that created it, but it still surfaces in a handful of states and whenever a buyer tours a home without a signed representation agreement.
How a Subagency Relationship Is Structured
A subagency arrangement involves four parties and a chain of authority. The seller hires a listing broker through a written listing agreement, creating the primary principal-agent relationship.1National Association of REALTORS®. Vocabulary: Agency and Agency Relationships A cooperating broker from a different firm then helps sell the property, and if that broker is acting as a subagent, they become an extension of the listing broker’s authority rather than a representative of the buyer.
The seller delegates power to the listing broker, and the listing broker delegates a slice of that power to the subagent. Loyalty points upward through the chain to the seller, even though the subagent spends most of their time face-to-face with the buyer.
In this arrangement the buyer is not a client but a “customer.” The distinction is more than semantic. A client receives full fiduciary representation. A customer receives honest treatment and factual information, but nobody at the table is working to get them a better deal.
What a Subagent Owes the Seller
Because the subagent is legally the seller’s agent, they carry the same fiduciary obligations the listing broker does: obedience to the seller’s lawful instructions, loyalty to the seller’s interests above all others, disclosure of any information that could affect the seller’s decisions, confidentiality about the seller’s private matters, proper accounting of funds, and reasonable care in performance. A subagent owes the same fiduciary duties to the seller as the seller’s own listing agent.2National Association of REALTORS®. Consumer Guide: Agency and Non-Agency Relationships
In practice this means the subagent cannot help a buyer in any way that works against the seller. If a buyer mentions during a showing that they’d pay more than their initial offer, the subagent is legally required to pass that information to the seller. The same goes for any detail about the buyer’s urgency, financing flexibility, or negotiating strategy. Information flows one way: toward the seller.
What Buyers Should Watch For
The biggest danger of subagency is that buyers often don’t realize it’s happening. The cooperating broker shows up, opens doors, answers questions, and generally acts like “their” agent. Many buyers share sensitive details, including how much they can really afford, how badly they want the house, and whether they’d waive contingencies, without understanding that every word may end up with the seller.
A subagent cannot advise a buyer to offer below asking price, cannot flag that the seller seems motivated, and will not negotiate aggressively on the buyer’s behalf.2National Association of REALTORS®. Consumer Guide: Agency and Non-Agency Relationships They do owe the buyer honesty and must disclose known material defects in the property, but that baseline falls far short of the representation a buyer’s own agent would provide.
If an agent hasn’t asked you to sign a buyer-broker agreement, ask directly: “Who do you represent?” If the answer is the seller or the listing broker, treat that agent the way you would treat the opposing side’s attorney. Be polite, but guard your financial information.
Most states require a written agency disclosure explaining who the agent represents. Timing varies: some states require it at first contact, others at the first substantive conversation about a specific property, others not until an offer is being prepared. The disclosure should identify the agent’s name, their brokerage, which party they represent, and, if they are acting as a subagent, that personal information shared with them may be relayed to the seller. In states that still permit subagency, the seller typically must authorize it in writing.2National Association of REALTORS®. Consumer Guide: Agency and Non-Agency Relationships The practical problem is that these disclosures often come too late or get buried in paperwork. A buyer who already told the agent their maximum budget during a casual phone call doesn’t get that information back just because a form arrives later.
Why Subagency Nearly Disappeared
Two forces pushed subagency out of residential real estate: vicarious liability for sellers, and the 2024 changes to how the MLS can handle compensation.
Vicarious Liability on the Seller’s Side
Under vicarious liability, a principal can be held accountable for the acts of their agent. Because the subagent is legally the seller’s agent through the listing broker, the seller can face a lawsuit for something a subagent said or did, even if the seller never met the subagent or knew they existed. If a subagent misstates lot boundaries, downplays a structural problem, or makes a misleading claim about the neighborhood, the buyer’s legal claim doesn’t stop with the subagent. The listing broker shares liability because the subagent was operating under their delegated authority, and the seller sits at the top of the chain.
Sellers had no practical way to supervise every cooperating broker who might show their home, yet they bore the legal consequences of those brokers’ errors. Listing brokers facing the same exposure began advising sellers to decline subagency offers and instead cooperate only with buyer’s agents, which shifts fiduciary duties and associated liability to the buyer’s side.
The 2024 NAR Settlement
The August 2024 practice changes effectively cut off the main mechanism that created subagency. Two changes matter most.
The MLS can no longer accept listings that include an offer of compensation to buyer brokers or other buyer representatives.3National Association of REALTORS. Summary of 2024 MLS Changes This eliminates the blanket offer of cooperation that historically created subagency relationships. Sellers can still offer compensation to a buyer’s broker, but that negotiation now happens off-MLS through direct communication.
And all MLS participants working with a buyer must now enter into a written buyer agreement before touring a home.3National Association of REALTORS. Summary of 2024 MLS Changes The agreement must disclose the specific amount or rate of compensation the broker will receive, state that fees are fully negotiable, and prohibit the broker from collecting more than the agreed amount from any source. Once a cooperating broker has signed a buyer agreement, they are operating as a buyer’s agent, not a subagent.
A broker acting as a subagent also cannot accept compensation from the listing broker without the express consent of all parties to the transaction.3National Association of REALTORS. Summary of 2024 MLS Changes Some states have gone further; Texas passed legislation eliminating subagency entirely starting in 2026.
What Replaced Subagency
Buyer agency has become the dominant model. The cooperating broker represents the buyer under a written agreement, the buyer is the client, and the broker owes full fiduciary duties to the person they are actually working with. This alignment is reinforced by the post-settlement requirement for written buyer agreements before home tours.2National Association of REALTORS®. Consumer Guide: Agency and Non-Agency Relationships
Other arrangements fill the remaining gaps. Single agency means an agent represents only one side of the transaction. Dual agency, where one agent or one brokerage represents both parties, requires written consent from both because the agent cannot fully advocate for either side. Designated agency assigns two agents from the same brokerage, one to each party. Transaction brokerage treats the agent as a neutral facilitator with no fiduciary duties, and several states use this as the default when no written agency agreement exists.
The common thread is that each of these models identifies, in writing and up front, who represents whom. That is the direct answer to the structural problem subagency created: a cooperating broker who built a relationship with the buyer while owing loyalty to the seller. If you are buying a home today, the written buyer-broker agreement is what keeps you from slipping into the customer role without noticing.