What is one drawback of sub-agency from a listing broker's standpoint?

The primary drawback of sub-agency for a listing broker is vicarious liability. In a sub-agency relationship, the sub-agent (a cooperating broker working with a buyer) is an agent of the listing broker and, by extension, the seller. Consequently, the listing broker and the seller can be held legally responsible for the actions, misrepresentations, or omissions of the sub-agent. This creates a significant risk for the listing broker, who has limited direct control or supervision over the sub-agent from another firm.

A. This is incorrect because sub-agency and dual agency are two different and distinct forms of representation. Sub-agency involves two firms representing the seller.

C. This is incorrect because the commission is typically split with a cooperating broker regardless of whether they are a sub-agent or a buyer's agent. This is not a unique drawback.

D. This is incorrect because, as explained above, the significant risk of vicarious liability is a major drawback of sub-agency.

1. Galaty, F. W., Allaway, W. J., & Kyle, R. C. (2022). Modern Real Estate Practice (21st ed.). In the chapter on "Real Estate Agency," the text explains that under sub-agency, the principal (seller) and the agent (listing broker) are liable for the sub-agent's misconduct. This concept of vicarious liability is detailed as a primary reason for the decline of sub-agency. (See Chapter 5, "Liability and Responsibility").

2. Maryland Real Estate Commission. (2021). Understanding Whom Real Estate Agents Represent (Disclosure Form). This official form, required by Maryland law, outlines the different agency relationships. It clarifies that a sub-agent owes loyalty to the seller, and the seller may be held responsible for the sub-agent's actions, implicitly highlighting the liability passed through the listing broker. (Section on "Sub-Agent").

3. Jennings, M. M. (2017). Real Estate Law (11th ed.). Cengage Learning. In discussions on agency law, the text establishes the principle that a principal is liable for the acts of their agents and sub-agents performed within the scope of their agency duties. This legal principle is the foundation for the listing broker's risk in a sub-agency arrangement. (See Chapter 7, "The Agency Relationship in Real Estate").