What is a Subagency in real estate? A clear guide

If you’re getting ready for the real estate exam or want a clearer picture of how different real estate agents operate, it’s essential to understand what a subagency in real estate is. This is a topic that often confuses new agents, buyers, and sellers alike.

This guide explains how subagency in real estate operates, its role in a real estate purchase, and how understanding it can help avoid conflicts of interest by clarifying each party’s responsibilities.

What is an agency in real estate?

Before exploring subagencies in real estate, let’s start with the basics: what is an agency in real estate?
An agency relationship forms when a real estate agent or broker agrees to represent a buyer or seller during a real estate transaction. This relationship includes fiduciary duties like loyalty, confidentiality, and full disclosure. The agent is legally and ethically obligated to act in the best interest of their client.

There are several types of agency relationships, including:

• General agency: where the agent represents the client in a range of matters (e.g., a property manager).
• Express agency: where both parties agree in writing or verbally, clearly outlining their roles.

How subagency in real estate works?

So, what is a subagency in real estate?

A subagency occurs when an agent (often a buyer’s agent) assists a listing broker in finding a prospective buyer for a property without representing the buyer. In this arrangement, the subagent continues to work for—and owes a fiduciary duty to—the seller.

In other words, the subagent helps with the sale, but their loyalty lies with the seller, not the buyer. The subagent must maintain confidentiality and act to obtain the best price or terms for the seller. 

A real-world subagency real estate example

Let’s say you’re a homebuyer, and you contact the listing agent to schedule a showing. That listing agent can’t represent both sides without written consent. If you don’t sign an agreement to work with that agent as a buyer’s agent, they—or any cooperating agent—could act as a subagent of the seller.

In this case, any advice they offer you must still serve the seller’s interests.Subagency real estate example:
You, as a buyer, walk into an open house, and the agent shows you around. You like the house, ask for advice, and they seem helpful—but they’re technically a subagent representing the seller, not you.

Risks of a subagency relationship for real estate agents and buyers

There are several concerns with a subagency relationship in real estate:

• Lack of representation for the buyer, who may not realize the agent isn’t working in their interest.
• Potential liability for both the listing broker and subagent if the buyer feels misled.
• Conflicts of interest, especially if the buyer discloses budget or other confidential information.

For these reasons, subagency is far less common today. Many real estate markets now encourage exclusive agreements to ensure that each party is represented accurately.

Is subagency still common?

While subagency still exists in some states, many regions have transitioned to buyer agency models. This shift protects both buyers and sellers by establishing clearer relationships and responsibilities.

Some states require full disclosure and written consent when a subagency is used. As always, practices vary by state, so it’s essential to know what’s legal and standard in your state of licensure.

Why This Topic Matters for Real Estate Agents

If you’re studying for your license, understanding what a subagency in real estate is (and how it differs from general or express agency) can help you avoid mistakes and serve your clients better.

It’s also a key part of many real estate licensing exams. Questions often test your understanding of:

• How agency relationships are formed
• Who owes duties to whom
• The implications of working without an agreement

How to Learn More with Lexawise

At Lexawise, we recognize that agency relationships can be one of the most challenging topics on the exam. That’s why our real estate exam prep includes easy-to-understand breakdowns of terms like subagency, express agency, and general agency.

• 4,500+ Practice Questions across every key exam topic
• Smart Analytics to track your performance and progress
• Real Estate Math Guide with easy-to-follow steps
• Unlimited Practice Exams to build confidence and endurance
• Real Estate Exam Study Guide PDF to study anywhere, anytime
• 800+ Flashcards to master your exam’s real estate terms
• 24/7 AI Tutor ready to answer your questions on the spot
• Video Lessons to visually guide you through complex concepts
• Audio Lessons so you can review key material on the go, hands-free

Lexawise fits every learning style—whether you prefer quick study sessions or longer review blocks. With these tools, you’ll know how to pass your real estate exam on your first try.

Summing-up

Understanding what a subagency in real estate is goes beyond passing the test; it’s about becoming a responsible, ethical agent. Whether you’re preparing for your state exam or working with your first client, understanding who you represent and the duties you owe is crucial.