- Sub-agent
::"For a more detailed explanation of real estate agency and non-agency relationships, see
Real estate broker "Sub-agent (or, broadly, Sub-agency) is a
real estate term in the United States describing the relationship which areal estate broker and his/her agents have with a buyer of a property.Traditionally and, for the most part, lasting until the early 1990s, the broker provided a conventional full-service, commission-based brokerage relationship under a signed listing agreement only with a seller, thus creating an agency relationship with fiduciary obligations under
common law in most US states . The seller was then a client of the broker.However, no such agency relationship existed with the buyer, and the broker's agents helped the buyer (who was typically known as his or her "customer"). In this situation, during the entire period in which the buyer looked at properties, entered into a
real estate contract , and finally closesd on one, that broker/agent functioned solely as the sub-agent of the seller’s broker.Some clear disadvantages exist for the buyer under sub-agency. There is no obligation to obtain the best price or terms for the buyer, since the broker, as sub-agent, was obligated to obtain the best terms for the seller, generally someone who he/she had never met and with whom no direct business relationship existed. Many states, notably
Florida [ [http://www.leg.state.fl.us/Statutes/index.cfm?App_mode=Display_Statute&Search_String=&URL=Ch0475/SEC278.HTM&Title=- Florida statute outlining types of representation available] ] andColorado , [ [http://www.dora.state.co.us/real-estate/contracts/2005Contracts/DD25-05-04.pdf Colorado: Types of brokerage outlined] ] have abolished sub-agency in favor of written Buyer Brokerage Agreements or the creation of Transaction Brokerage.It was only with the advent of
Buyer brokerage in the 1990s - the legal representation of a buyer by a broker - that a buyer became a client of the broker and entered into the same fiduciary relationship enjoyed by the seller.References
ee also
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List of real estate topics
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