Sub-agent
Encyclopedia
Sub-agent is a real estate
term in the United States and Canada describing the relationship which a real estate broker
and his/her agents have with a buyer of a business, home, or property.
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 of the US and Canada. 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 closed
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
and Colorado
, 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.
In the Philippines, a Sub-Agent is someone who is under the supervision and operational control of a Real Estate Broker. The Sub-Agent is not an agent of the Buyer or Seller. It is the Broker who is the Agent of the Buyer or Seller. The Sub-Agent is an agent of the Broker, works for the Broker, and represents the interest of the Broker. The formal position of a Sub-Agent in the hierarchy of real estate practitioners in the Philippines is equivalent to the rank of Salesperson. A Salesperson is described in Section 3 and Section 31 of the Real Estate Service Act of the Philippines (Republic Act 9646).
Real estate
In general use, esp. North American, 'real estate' is taken to mean "Property consisting of land and the buildings on it, along with its natural resources such as crops, minerals, or water; immovable property of this nature; an interest vested in this; an item of real property; buildings or...
term in the United States and Canada describing the relationship which a real estate broker
Real estate broker
A real estate broker, real estate agent or realtor is a party who acts as an intermediary between sellers and buyers of real estate/real property and attempts to find sellers who wish to sell and buyers who wish to buy...
and his/her agents have with a buyer of a business, home, or property.
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
Common law
Common law is law developed by judges through decisions of courts and similar tribunals rather than through legislative statutes or executive branch action...
in most of the US and Canada. 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
Real estate contract
A real estate contract is a contract for the purchase/sale, exchange, or other conveyance of real estate between parties. Real estate called leasehold estate is actually a rental of real property such as an apartment, and leases cover such rentals since they typically do not result in recordable...
, and finally closed
Closing (real estate)
Closing is the final step in executing a real estate transaction.The closing date is set during the negotiation phase, and is usually several weeks after the offer is formally accepted. On the closing date, the parties consummate the purchase contract, and ownership of the property is transferred...
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
Florida
Florida is a state in the southeastern United States, located on the nation's Atlantic and Gulf coasts. It is bordered to the west by the Gulf of Mexico, to the north by Alabama and Georgia and to the east by the Atlantic Ocean. With a population of 18,801,310 as measured by the 2010 census, it...
and Colorado
Colorado
Colorado is a U.S. state that encompasses much of the Rocky Mountains as well as the northeastern portion of the Colorado Plateau and the western edge of the Great Plains...
, have abolished sub-agency in favor of written Buyer Brokerage
Buyer brokerage
A buyer brokerage or buyer agency is the practice of real estate brokers and their agents representing a buyer in a real estate transaction rather than, by default, representing the seller either directly or as a sub-agent. In the United Kingdom and Australia, the most common term is buying...
Agreements or the creation of Transaction Brokerage.
It was only with the advent of Buyer brokerage
Buyer brokerage
A buyer brokerage or buyer agency is the practice of real estate brokers and their agents representing a buyer in a real estate transaction rather than, by default, representing the seller either directly or as a sub-agent. In the United Kingdom and Australia, the most common term is buying...
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.
In the Philippines, a Sub-Agent is someone who is under the supervision and operational control of a Real Estate Broker. The Sub-Agent is not an agent of the Buyer or Seller. It is the Broker who is the Agent of the Buyer or Seller. The Sub-Agent is an agent of the Broker, works for the Broker, and represents the interest of the Broker. The formal position of a Sub-Agent in the hierarchy of real estate practitioners in the Philippines is equivalent to the rank of Salesperson. A Salesperson is described in Section 3 and Section 31 of the Real Estate Service Act of the Philippines (Republic Act 9646).