In historical real estate practice, an arrangement existed where a broker authorized by a seller to represent them extended that representation through other brokers. This meant a secondary agent worked on behalf of the principal seller, even though they were engaged by another agent. The concept involved a fiduciary duty to the seller, even if the sub-agent’s direct contact was with the primary listing brokerage.
The creation of this type of agent relationship allowed for broader market reach, potentially exposing a property to more prospective buyers. However, it also presented challenges, particularly concerning divided loyalties and potential conflicts of interest, as the sub-agent’s commission was often tied to a successful sale, incentivizing them to prioritize the transaction over the seller’s best interests.
