Subagent

Key Takeaways

• A subagent is an agent of another agent, so the authority runs down a chain rather than straight from the principal.
• Chapter 18.86 RCW never uses the word subagent. It places the agency relationship between the firm and the principal.
• RCW 18.86.010(2) makes the appointed broker, the firm's designated broker, and the supervising managing broker all agents of the principal.
• A cooperating broker from another firm who works with the buyer is the buyer's agent under RCW 18.86.020(1), not the seller's subagent.

What It Means

A subagent is an agent of another agent. The authority runs down a chain instead of straight across: a principal hires an agent, and that agent hands part of the authority to someone working under them. The everyday example sits inside the firm. A seller hires the firm, and the individual licensee who lists the house works under the firm and its Designated Broker, which is why course material describes an Affiliated Licensee as a subagent of the firm.

The older and wider use of the word came from the multiple listing service. A listing firm would offer subagency to every other member firm, so a broker from another company who found the buyer worked as a subagent of the seller and owed loyalty to the seller rather than to the person riding in the car. Washington replaced that arrangement with a statute.

The word still shows up on exams and in older forms, so it is worth knowing. The question underneath it matters more: whose agent is this broker, and how did that Agency Relationship get created? In Washington the answer comes from chapter 18.86 RCW rather than from any chain of authority. If the categories still feel slippery, our overview of the three types of agency representation is a useful companion.

How It Works in Washington

Chapter 18.86 RCW answers the question for Washington, and the word subagent never appears in it. RCW 18.86.010(1) puts the agency relationship between "a real estate firm and a principal." RCW 18.86.010(2) then defines an agent as "a broker who has an agency relationship with a principal, including the firm's designated broker and any managing broker responsible for the supervision of that broker." The licensee the firm appoints, the designated broker, and the supervising managing broker are therefore all agents of the principal by statute. The course's picture of a licensee acting as a subagent of the firm describes the same people. The statute simply names each one an agent instead of routing authority through a chain. Our explainer on broker versus managing broker licenses covers who sits where in that structure.

The old multiple listing service model is gone here. RCW 18.86.020(1) provides that "a broker who performs real estate brokerage services for a buyer is a buyer's agent" unless that broker's own firm appointed them to represent the seller under a services agreement. A cooperating broker from another company is the buyer's agent, not the seller's subagent, and RCW 18.86.080(2) confirms that "an agreement to pay or payment of compensation does not establish an agency relationship between the party who paid the compensation and the broker."

Two more sections close the door that subagency used to leave open. RCW 18.86.090 sharply limits a principal's Vicarious Liability. A principal is not liable for an agent's act, error, or omission unless the principal participated in it or authorized it. The other exception is narrow: the principal benefited from it, and a court finds it highly probable the claimant could not enforce a judgment against the agent. RCW 18.86.100 adds that "unless otherwise agreed to in writing, a principal does not have knowledge or notice of any facts known by an agent of the principal that are not actually known by the principal."

Example

Emerald Bay Realty signs a written services agreement with Cliff Dawson to list his Everett house at $689,000 and appoints Nora Bhatt as the broker who will represent him. Under RCW 18.86.010(2), Nora, the firm's designated broker Val Ruiz, and Nora's supervising managing broker are all Cliff's agents. Course material would call Nora a subagent of the firm, and the statute lands in the same place by naming her an agent directly.

Marcus Lee, a broker at a different firm, brings buyer Anita Sosa and writes an offer at $672,000. Because Marcus performs brokerage services for Anita, RCW 18.86.020(1) makes him her agent. The fact that Emerald Bay will share the compensation Cliff agreed to pay does not turn Marcus into Cliff's subagent, since RCW 18.86.080(2) says paying compensation does not create an agency relationship. And if Nora learns from the inspector that the roof is failing and says nothing to Cliff, RCW 18.86.100 means Cliff does not automatically have notice of that fact just because his agent knew it. Nora's own duty to disclose material facts under RCW 18.86.030(1)(d) is a separate question, and that one runs to every party in the transaction.

Common Mistakes and Exam Traps

• In Washington a cooperating broker from another firm is not the seller's subagent. RCW 18.86.020(1) makes a broker who performs brokerage services for a buyer that buyer's agent unless the broker's own firm appointed them to represent the seller.
• Chapter 18.86 RCW never uses the word subagent. It gives the agency relationship to the firm and names the appointed broker, the designated broker, and the supervising managing broker as agents of the principal.
• Sharing a commission does not create agency. RCW 18.86.080(2) says an agreement to pay or the payment of compensation does not establish an agency relationship.
• A principal is not automatically charged with what an agent knows. RCW 18.86.100 says a principal does not have knowledge or notice of facts known by an agent unless the principal actually knows them or the parties agreed otherwise in writing.