Enchanted Realty 
505 454-0701
EMAIL: mail@enchantedrealty.com
Real Estate Information
Real Estate language
Katherine, Charles, and Elizabeth Boyd would be glad to help you with your purchase or sell of real estate. That includes answering your questions about real estate. We have current listings of homes, land, and commercial resort businesses in Northern New Mexico.
We provide the following information to help explain real estate business relationships. Good things to know in how you hire a real estate professional to help you in buying or selling real estate.
On January 1, 2004 the New Mexico Real Estate Commission established the term "Transaction Broker" in New Mexico. New Mexico followed the State of Colorado in establishing the term "transaction Broker" . Transaction Broker is our preferred way at Enchanted Realty of representing buyers and sellers of real estate. The transaction broker is a facilitator in bringing the buyer and seller together in completing the real estate deal.
A new form ( RANM Form 1401) that is titled "Basic Broker Duties" that is required by the New Mexico Real Estate Commission to be provided to the customer or client to read and acknowledge by their signature before executing any written agreement that establishes a business relationship with the real estate office. The form outlines the basic duties that are required of the real estate licensed person to perform for their customer or client.
Link Our Link page listing the basic duties of a real estate licensee in New Mexico
Note: Effective January 1, 2007, the New Mexico Real Estate Commission requires that the Basic Broker Duties be revised that all brokers are to disclose to customers and clients of the brokerage relationships options available in New Mexico.
TYPES OF BROKERAGE RELATIONSHIP in New Mexico
1. Transaction Broker: A brokerage relationship that provides real estate services without entering into a legal agency (real estate agent) relationship.
2. Exclusive Agency: a express written agreement between a person and the brokerage wherein the brokerage agrees to exclusively represent as a agent the interest of the person in a real estate transaction. These agreements include buyer agency, seller agency, designated agency, and sub agency agreements.
3. Dual Agency: a express written agreement that modifies existing exclusive agency agreements to provide that the brokerage agrees to act as a facilitator rather than a exclusive agent of either party to the transaction.
The important aspect in the way a real estate agent works for you is the concept of common law agency. A comparison would be like United States government special agent, 007 spy agent, or FBI Agent. When you sign a legal document that makes a person an agent for you, the agent has the capacity to act on your behalf even in your absence, When someone is your agent, it denotes that you have given them certain powers to operate in your behalf.
Real Estate Agent
A seller's agent or the varying term of seller's representative means that real estate licensed person owes their loyalty and fiduciary duty to the person selling the property. A buyer's agent or the varying term buyer's representative owes loyalty and fiduciary duty to the person buying the property. A transaction broker is neither the agent of buyer or seller but merely acts as a facilitator to bring buyer and seller together to complete the transaction. Brokerage relationships of agency (real estate agent) are created in writing and can not be orally assumed in New Mexico.
You can find advertising with buyers agents stating that they will work for you free of charge and that the seller of the real estate normally pays all of their commission or fees. We the brokers of Enchanted Realty do not think "free" is a correct term. The truth is the buyer is the one who writes the big check to pay and/or takes a mortgage for 15 or 30 years to pay for the real estate. Most common sense people would agree that the buyer really pays for everything by the end of the accounting disbursements. The question being how much or how little the buyer got for the dollar spent. The truth is most sellers merely tack on the sales commission, therefore the commission is not "Free".
The buyers agent is a relative new concept. In the old days there were only seller's agent and the old caveat of "buyer beware" prevailed. The concept of "free" came about because now the buyer had their own agent representing them (and splitting the seller commission) instead of just the one seller's agent representing loyalty to the seller and collecting the full commission of say six percent of the gross (total) sales price.
Dual Agency is a very confusing term. In many states dual agency is illegal. There is no way for a licensed person to perform ethically under dual agency. You can not be a "agent" for both parties of buyer and seller. In New Mexico under a dual agency agreement the parties modify the agreement that the "agent" acts as a intermediary the same as a transaction broker. The licensed person should not be giving opinions to either buyer or seller. Enchanted Realty brokers will not utilize a dual agency agreement.
See Link: http://www.usdoj.gov/atr/public/comments/212656.pdf
Why is this important? Why should I even care?
The importance of disclosure of agency is the consumer needs to know for their financial benefit of who is playing on what team. In sports, opposing teams wear different color jerseys to determine who are team mates.
Today, the old caveat of buyer beware should not be used and consumers are being protected by new revisions in licensing laws. Full disclosure is the rule of law in today's real estate market. Thus, as a New Mexico Licensed Broker, it is our legal duty to comply with the laws of this beautiful state, that were put into place to protect all consumers, buyers, and sellers.
By offering Transaction Brokerage, we are able to relieve the consumer/client, of some of the burden that "agency" placed on them. (A burden of liabilities for the consumer/client) With agency, the Real Estate Agent has the capacity to commit the client to a binding legal point. Agency is not about quality, it's really about capacity. We feel that the consumer should be aware that if they choose to be represented by a real estate brokerage, with an Agency contract, this allows the agent to represent and commit the client to things outside the client, buyer, or seller's knowledge to things they have not signed for, or even agreed to. As Transaction Broker however, we must be professional, and abide by the laws and rules that are set in place by the state to protect the client, buyers and sellers. The Transactional Broker does not have the capacity to commit the consumer/client outside their knowledge. With this being said, we offer Transactional Brokerage at Enchanted Realty. We encourage you to consider this option in real estate services. If you prefer a contract granting us agency, we will consider a contract containing agency.
Agency/Fiduciary Duties and Obligations
Acronym: OLD CAR
The duties of real estate agent go beyond those included in the basic duties and include:
1. Obedience means obeying all lawful instructions of the principal. The principal of the buyer's representative would be the person buying the property. The principal of the seller's representative would be the person selling the property. Does not have anything to do with the principal of the local high school.
2. Loyalty means that the real estate agent must act at all times in the best interest of their principal. The buyer's agent would owe loyalty to the buyer of the property. The seller's agent would owe loyalty to the seller of the property.
3. Disclosure obligates the real estate agent to disclose all relevant information to their principal in a timely manner.
Thus,
A seller's real estate agent must disclose any information that would help the seller's ability to obtain the highest price and best terms in the sale. A buyer's a real estate agent must disclose any information that might help the buyer's ability to obtain the property at the lowest price and best terms in the sale. NOTE: the obligation to disclose known material facts about the property applies to all persons in the transaction and does not depend on the existence of an agency relationship.
4. Confidentiality means the real estate agent must safe guard all information that might weaken their principal's negotiating position. This duty of confidentiality extends beyond the agency relationship in time. In other words, the agent is to keep the information confidential after the real estate deal is complete and can not reveal the information in a future deal involving the same property.
5. Accounting means keeping tract of all money and documents entrusted to the real estate agent and maintaining a accurate record of financial matters.
6. Reasonable care means the real estate agent must apply their skill and expertise, in a professional manner, for their principal.
Definitions:
Fiduciary - a person holding the character of a trustee. good faith, and candor, exercising a high standard of care.
Qualifying Broker- The person licensed by the New Mexico Real Estate Commission as a Qualifying Broker. This licensed person is the responsible person for the operation of the business. All listing agreements are taken under the control and supervision of the qualifying broker. The qualifying broker (QB) supervises all associate brokers and sales persons.
Broker in Charge- The licensed person that is responsible for the operation of the brokerage business in the absence of the qualifying broker, when the qualifying broker's absence from the business exceeds seven days.
Associate Broker- Licensed person as a broker and works under a supervising Qualifying Broker.
Real Estate Salesperson- Licensed person as a salesperson and works under a supervising Qualifying Broker. Salesperson term is being eliminated from the license law on January 1, 2006 in New Mexico. Sales person will be grandfathered to associate broker and will have a three year period to comply with additional education and testing requirements.
Brokerage- means a licensed qualifying broker, the licensed real estate business represented by the broker and its affiliated licensees.
Licensee- means anyone holding a valid real estate license subject to the jurisdiction of the New Mexico Real Estate Commission.
Note: New legislation was passed that eliminates the salesperson license in New Mexico effective January 1, 2006. All current salesperson licensee will be grandfathered to a license as a associate broker on January 1, 2006. Under the new law there will be two license categories, Qualifying Broker and Associate Broker. Salespersons have a three year period to comply with new education requirements.
Respondent Superior
The Master is responsible for the acts (action) of the servant. This legal term means that the master is liable in certain cases for the wrongful acts of the servant, and the principal for those of his agent. In a real estate transaction this means the client (Person buying or selling real estate) may be liable for the wrongful acts of their real estate agent.
A problem associated with sub agency sometimes arises usually in larger real estate firms with many people. The listing agreement is with the Qualifying Broker of the real estate firm. Thus, all salespersons, and associate brokers that work under that qualifying broker can have or the potential to establish sub agency with the client. Therefore if another licensee (sales person/associate broker) under a qualifying broker makes a mistake, it is possible that a client can be held responsible for that mistake. It is for these reasons of liability the Transaction Broker relationship was established.
See link: http://www.supremecourt.nm.org/pastopinion/VIEW/04ca-056.html
Advice to Use Professionals/Trades Persons
If you do not understand any part of a contract involving real estate services you should consult with an attorney. One of the attorney's job would be to help explain the legal effects of the contract. Problems can arise with real estate transactions many years later. The expense of an attorney to review the real estate deal can save much time, expense, and trouble in real estate transactions.
Enchanted Realty will advise you to all ways seek the advice of other professionals/trades persons to satisfy yourself that you are making a wise choice or decision in real estate matters. Other professionals/trades persons examples include attorneys, accountants (tax advisor), engineers, building contractors, water testers, electricians, plumbers, home inspectors, roofers, septic inspectors, environmental assessment (lead, radon), police (Megan's Law), school personnel (School quality issues), soil specialists (compaction or settlement problems), Termite or insect inspectors, the local librarian or Floyce down the street that remembers every last detail of the last fifty years of town history.
A home inspector should operate under the standards of a nationally accepted protocol such as ASHI, American Society Home Inspectors. www.ashi.com A home inspection for a fee of around $325 to $500 is not assurance that all major problems will be found in a home. Norm Abram of This Old House recommends seeking individual advice from tradespersons such as electricians or plumbers about specific problem areas rather than simply relying on one home inspection service.
Examples of problem areas:
Any home built prior to the period of about (1978-1983) that is going to be occupied by small children should be assessed for lead per US EPA guide lines. The concern being lead base paint was sold up to about 1978 ( stored paint by contractors or homeowners could have been used later than 1978 therefore professionals use 1983 as a rule of thumb) and can effect the health and development of people especially small children.
All Counties in New Mexico are known to have radon.
A number of houses in Santa Fe built in the early nineties had a brand of tubing installed in the concrete floors for radiant heat that subsequently failed. The floor plan of many of these homes did not provide sufficient space for easy conversion and installation of a central heating unit in the home.
Another example was the failure of copper pipe under concrete slabs. People have spent a great deal of time and money to repair a leak, only to have future leaks.
There have recently been several law suits filed in New Mexico, that involve Title Insurance issues. Title insurance companies does a search of the public record for their benefit to decide to issue the title insurance policy. The search of the public record is not for the benefit of the policy holder.
Real Estate fees and commissions
Customers (buyers/sellers) do not generally pay fees upfront. The commissions or fees for professional services are deducted and distributed at the time of closing and funding, which is generally conducted by a title company escrow officer.
In New Mexico, as well as other states, no government agency or private association set rates, commissions, or fees for real estate licensed services. The commission rate or fee for professional services is set by negotiation by you the client/customer with the licensed real estate person. It is possible to have a set dollar amount or trade for other goods and services is perfectly legal and proper.
Business transaction today in metro areas have a multiple listing service (MLS) involved with membership rules to be followed by the licensed member. Please be aware that the multiple listing service can not set rates or commissions. The listing agent/broker takes a listing contract with the owner of the property and places the selling information in a computer data base called the MLS. The listing broker offers in the MLS a commission rate to other licensed persons if they procure a ready, willing, and able buyer for their listed property.
Some brokers give added incentives of cash bonus or a free vacation trip to licensed agents for motivation to show their property. Brokerage fees generally speaking range from 5% to 10% of (multiplied times) the gross sales price of the property. (Example $100,000 X 6% = $6,000 sales commission) A generally accepted commission for a seller's full service broker is 6% that can be split 50/50 with the buyer's broker. In a MLS transaction it would be common for the commission to be split four ways. (Example of four way split would be 1. Listing Broker, 2.Listing Agent, 3. Buyer's Broker, 4. Buyer's agent) An office exclusive listing means the real estate broker handles the brokerage in house and does not offer the property in the MLS system. Vacant land and resort property is generally 10%, however, sometimes resort property can go up to a 15% commission rate. Property management can have a separate range from 10% to 50% commission.
Exclusive right to sell means you are giving the broker the complete authority to market and sell the property and will owe the commission to that broker regardless of who finds the buyer. The exclusive right to sell is the most common arrangement today because real estate sales people want assurance that they are going to be paid for their professional services. The listing agreement is a legally binding contract that is enforceable in a court of law. Please keep in mind that as soon as the listing agreement is signed and marketing activities begin expenses start escalating very fast for the real estate professionals.
A new type of service is the limited service Brokerage that offers very limited service for a set fee, rather than a percentage of the selling price. These firms are not full service brokerages. They generally charge a set fee just to list your property in the MLS computer data base. The owner of the home is contacted by buyers' agents/potential buyers directly for showing of the property. The limited service broker may provide other services at a set hourly rate of pay that generally ranges from $75 to $150 per hour. The limited service Broker must give notice of the limited service to other real estate licensees is a requirement of the New Mexico Real Estate Commission.
A basic premise the seller needs to remember the commission rate needs to compensate the licensed real estate agent adequately to get them to work for them. Gross receipts tax is added to the negotiated commission paid in New Mexico. The gross receipts tax is paid according to the location of the property. A large part of the negotiated commission can be what type of marketing activities will be conducted to get maximum exposure of the property. Advertising is very large part of an expense budget.
DISCLAIMER
Please understand this is a generic type explanation in general terms and each individual brokerage is free to establish their own office policies and pricing structure. There is no one right way or wrong way.
ENCHANTED REALTY POLICY
If you need help selling or buying property we are ready to discuss any questions that you may have in an open and honest fashion. We do not delegate clients to assistants. We are a completely independent family owned real estate brokerage business licensed as Qualifying Brokers in the State of New Mexico. We have no ties under the table or above the table to any other real estate services business so we are free to work for you in the most fair, honest, and ethical manner possible. We make a diligent effort to educate ourselves on current real estate practices and work hard at providing good service to our customers. If you have had problems in the past with other real estate firm's, then we would appreciate the opportunity to discuss any real estate issues with you. We strive at being different type of real estate business that will listen to your needs and then offer individualized service with no bureaucracy. If you like dealing with big major corporations then be advised our method of doing business is about 180 degrees different.
We at Enchanted Realty strive to treat all people the way we would want to be treated.
Call Enchanted Realty
Katherine Boyd, Charles Boyd, or Elizabeth Boyd
Qualifying Brokers
(505) 454-0701