Using the promulgated New Mexico real estate forms from the Realtors® Association of New Mexico, there is a process for offers and counter offers. This process, if properly followed, will produce a document trail that makes it very clear later as to the motivations and desired actions of all participants.

1. The Buyer(s) execute a purchase agreement, or offer to buy.
2. Their broker presents the offer to the Seller(s) broker, who presents it to the Seller.
3. The Seller will execute another document, the counter offer, which indicates the differences in what the purchase offer indicates and what they are willing to do.
4. The Buyer can accept that counter offer or do their own counter to that one.

This back and forth process requires a fresh counter offer document, normally one page, for each step. This leaves an excellent paper trail for all the negotiations. It is important to realize that the purchase agreement is still valid in all its terms throughout this process. Each counter offer indicates that the purchase agreement and named previous counter offers are a part of the agreement. Each subsequent counter offer is to submit changes to all previous terms.

In other words, unless amended by a counter offer, all terms in the purchase agreement are agreed to by both parties. If you don't agree with something, it must be specifically addressed in a counter offer. And subsequent counter offers can change previous agreed upon items in counter offers or the purchase agreement.

Taos Real Estate Foreclosures

Taos has a share of foreclosure homes as well, and in all price ranges.  However, as we were fond of saying when things were booming up until 2007, Taos real estate is a very unique market.  It's unique in many ways, particularly the predominance of vacation and retirement properties.

The Taos real estate market will not react to national news in the same way as metropolitan areas, or even the same as more rural areas with industry or stable employment opportunities.  Our market is much more influenced by how people feel about their economic present and future.  These are the people who buy vacation homes, and they aren't feeling that upbeat right now.

The stock market is taking a hit as I write this, as the jobs report just came out and basically, there weren't any new ones created in the last reporting period.  When their other investments aren't doing well, vacation home buyers stay out of the market.  If you've been eyeing the Taos real estate market for a while, you know what I mean.

Taos Real Estate Buyer & Seller Motivations

The good news is that, if you have the resources and want to  purchase Taos real estate, there's never been a better time.  While prices are definitely down, they are dropping like the rest of the country because most vacation home sellers don't have to sell, less motivated is the key.

The fact that their home is listed doesn't necessarily mean that they must sell, only that they would like to.  So, the tendency is to list at a price somewhere above the market and hope for the best, enjoying the property in the interim.

What Taos real estate buyers need to know is that the list price is, like no other time in the last dozen years, definitely not the price you will pay for the property.  My recent buyers have been offering at significant discounts to list.  Of course, a cash purchase carries the greatest bargaining power, but solid pre-arranged financing works almost as well.

Taos real estate isn't losing its appeal, with the natural beauty, melding of cultures, and the outdoor recreation opportunities still a draw for tourism and those desiring a vacation or retirement property.  The trick now is to not necessarily time the market and try to  buy at the very bottom.  It's to  understand that we're probably in a very broad "U" shaped bottom now.

Recovery and appreciation are several years away, but the buying power of a ready buyer with funds or financing has never been better.  Purchases are being made at deep discounts, as Taos real estate sellers don't want to lose a buyer with so few in the market these days.

So, if you're a buyer, and if your finances are such that you can buy a vacation home now, don't let national news coverage be the determining factor.  Taos real estate is, and always will be, a very unique market.

Taos real estate isn't the stock market.

Having done this myself, as well as losing money in commodities and in some creative stock option strategies, I can identify with the desire to "buy at the bottom" and watch your investment grow.  The problem is in calling that bottom, actually figuring out when things are just about to turn around.  You normally can't buy a stock below the current market range, though some of those "creative option strategies" I mention can work, but they're difficult.

The good thing about Taos real estate, or real estate in general, is that it's not a market with prices set by a group of "market makers" working between buyers and sellers.  While real estate professionals are involved, it's still a direct negotiation between the buyer and the seller.  This provides opportunity to become your own "market maker" as a buyer.  It's a process of making a bottom instead of trying to be there when a bottom is reached; even if there is ever a time when we can easily look back and say that a bottom in the Taos real estate market was reached on a certain date.

In the last two quarters of 2010 I had a burst of business, and had five deals working with buyers.  One was commercial, one a foreclosure, one a large land parcel, and the other two were very nice homes, one with river frontage.  While no "beating up" of sellers happened, several of these deals were negotiated with a significant discount to the listing price, and one at less than half of the original price at which the property was initially listed.  True, it had been listed for almost two years, and the price at the time of the negotiation was significantly lower, but the final price was still about about 12% below that.

The point is that you'll never really know for sure the motivations influencing the seller, and you'll never know for sure what you could purchase Taos real estate for unless you make an offer.  Just like many experience in the stock market, waiting can cause us to be looking back later and chastising ourselves for missing that elusive market bottom.  In just the last few weeks, I've seen some homes that were on buyer watch lists go under contract.  They were bargains, with significant reductions in price over a year or more on the market.  I'll be checking to see what the final prices were, as I have to wait until they've closed to see it in the MLS.

There just may be some cases of buyers "making their bottom" with good negotiations in a slow Taos real estate market.

Taos Buyer Agent or Agency

Taos Buyer Agent vs Transaction Broker

Read this article about true "buyer brokerage," and the fact that it's only a pure buyer representation company if the brokerage doesn't take listings. A discussion of "agency" versus "transaction brokerage" in New Mexico is for another article. Just know that very few transactions in Taos are done with the brokerage as an "agent" of the seller or the buyer. Most are done as "transaction brokerage."

While the ad isn't untruthful, it can confuse as to when buyer agency/brokerage is available and when it isn't.  As far as being a buyer's broker or buyer's agent in any specific transaction, a brokerage can be a buyer's broker or agent, but they cannot take that single client representation approach with all of the diligence that should be invested if they are representing the buyer for one of their own listings.  So sometimes they can be the buyer's "agent", and sometimes they can't.

A Pure Taos Buyer Agent Doesn't Take Listings

When I decided to become a "buyer brokerage," "buyer's agent," or "buyer broker," (take your pick) I immediately divested my brokerage of listings. I do not take listings, and will not. This allows me to state absolutely that Gallery Realty of Taos is a true Buyer Brokerage. My buyers will never be placed in a position to experience possible conflicts of interest in a transaction because of dual representation when their Taos buyer agent is also listing properties. By only representing buyers, I can bring a diligence to their representation that can never be in danger of any conflicts of interest in transactions related to "in-house" listings.  This is the job of a true Taos buyer agent.

I discuss the best sites for searching properties to make sure you see accurate and timely information, through negotiations, pricing, repairs, documents, title insurance, the appraisal, and more.  Published by Turner Publishing, the book is available at all major book outlets online.

In Taos real estate buyer brokerage, I consider one of the most important parts of my job to be thorough in the gathering of information and documents, along with a careful look at things like surveys, title binders and easements.  In doing so, any problems with assured and insurable legal access to the property should be discovered and corrected, or maybe the deal shouldn't be closed.

One Taos real estate example that really didn't impact my buyer client that dramatically, does illustrate how some property owners could have a problem later due to the only access road having no easements recorded.  My client purchased some acreage up a road that began at the main state highway, crossed about 100 feet of BLM land, then meandered up into the mountains.  There were at least a dozen other homes and vacant land properties higher on this road than the property my client was buying.

While the issue of the 100 feet of government land crossed is the subject of another post, this is about her neighbors up the hill.  There were no recorded easements or road maintenance agreements to be found in county records related to any of this Taos real estate.  The road had some hairpin curves to gain altitude, and one of these caused about 60 feet of the road to be inside the property my client purchased.  Another curve crossed the corner of a property higher up the road with a permanent resident.  He had placed a gate across the road, though it wasn't locked at times I was there.

While New Mexico law doesn't normally support any action that tries to adversely impact real estate by cutting off access and making a property "land-locked," it doesn't mean that either of these owners can't cause their neighbors up the hill problems and expense in getting a gate removed or unlocked for them to access their properties.  By not having recorded easements, the Taos real estate title insurer will normally avoid any coverage that insures access, and court costs to fight the blocking of the road would not be covered.

It's very important for the buyer broker and the buyer to carefully examine roads and access on surveys to determine any crossing of property owned by others, and to verify that there is an easement recorded that assures this access is legal and not going to end up in a Taos real estate access dispute.

The mere fact that a property has been foreclosed does not make it a value play.  If anyone knows what's going on in the marketplace and the value of a property, it's a lender.  They aren't about to hit the market undervalued from the start.  Foreclosed properties can and do drop to steep discount  levels, but it is usually after some days on the market.

At any rate, the best way to keep tabs is with a custom search and alerts to let you know every time a price is reduced, on the day it's reduced.  My last client made a steal of a deal doing just that.  The home had been on the market many months, with several price drops over time by the lender.  When it hit her mark, she acted within 24 hours, and beat two other offers by just hours.  And, we got some great concessions in the deal as well.  There are deals to be had in the Taos real estate market, but you need to be vigilant.

We have sellers holding the line on price, and buyers coming in thinking that they are going to capture the deal of the century simply because of the gloom and doom in the media.  Taos isn't going to yield steal deals in the $300k through $1 million range, at least not now.  If things begin to improve, we may have seen the extent of bargains.

However, there are a lot of sellers holding on price with listings that have been on the market between one and two years.  It's unlikely that the current crop of buyers will find common ground with most of our seller group.  Or, perhaps all of the government bailouts will not help and the situation will worsen.  I wouldn't count on it, but maybe this summer, some low offers will lure sellers to capitulate.

It does say that you can if you have the written permission of the buyer or seller to do so, but I've never asked for that permission, and doubt any other brokers normally do either.  So, if a broker starts volunteering that information, it could be a lot more than an ethical violation.

That said, it is a question asked very often by my buyer customers.  I can't answer it, and will just tell you to make the offer you believe is the right first offer for you.  Never offer full price unless you REALLY want to lock up the property fast in a seller market (certainly not the case when this is being written).

• Too low risks a backlash of a high counter or the seller sending you away
• But, "too low" is a hard number to peg
• Too high and you'll likely pay more than you had to

In most cases, when I discuss this with a buyer, we come to a first offer that leaves room to bargain on both price and contingencies, with the outcome of a purchase price below their "walk-away" price.

• heavily weighted toward vacation and part-time use;
• second homes with no need to relocate for job, etc;
• owners can continue to enjoy home while for sale;
• many are vacation rentals, and can continue while listed; and
• the market can be highly seasonal with the ski area considered.

Motivation plays a large roll in the negotiation process.  And there can be a distinct lack of motivation on the part of both buyers and sellers in the Taos real estate market.  Many buyers are looking for a recreation retreat in the form of a part-time second home.  They don't NEED this home, but they do want it.  Not needing it is definitely a motivational factor.  There isn't a great pressure on buyers to actually buy a home.  They can continue to rent when they come to ski, hike or buy art.

Sellers on the other hand, are the buyers of the past.  They are still, in most cases, enjoying the area, art and outdoor recreation.  They can continue to enjoy these things with little interruption to their visiting routine, even with the home listed for sale.  This means that there is little or no pressure to aggressively price their property in order to get it sold.  They can just put a top end price on it and continue to come skiing.

When a buyer does decide to make an offer on Taos real estate, whether it's a home or land, the fun begins for the real estate broker.  It's a difficult market for bringing the buyer and seller to a deal.  In 2007, I wrote more contracts that never got to acceptance than those that did.  It was a variety of factors, but it usually came down to a buyer without great motivation and looking for a really good deal bumping into a seller without great motivation and looking for the highest price.

The buyer's permanent residence location plays a factor as well.  Buyers from California bring attitudes and real estate experiences that are quite different from a Texas or a New York buyer.  None of them are unreasonable, but each has their own idea of how it should go.  Then they bump into the laid-back Taoseno seller who doesn't really care whether the home sells soon or not.  One thing that seems better in Taos is the lack of personal offence taken when low offers are made.  Some buyers come in too low, but it doesn't seem to get the sellers that excited.  They just counter high and the fun begins.

If you're contemplating buying Taos real estate, it would be good to keep these things in mind.  Unless the market really gets bad, it doesn't seem likely that there will be any true "real estate bargain sales" made.