In the article "Housing Market: Buyer Really Beware," Time.com states that today's market causes desperate sellers to omit material facts, or even lie, to get their home sold in a buyers' market.  Items mentioned include:

• mold
• incorrect taxes
• lot size mis-stated
• home size mis-stated
• no or under-stated utility bills
• not disclosing pest problems, noise issues, past damage, etc.

The article suggests that the buyer ask to see utility and tax bills, get inspections, etc.  It's interesting to me, as there's no way one of my clients will get close to closing with mis-stated square footage or lot size, or any major problems in the areas discussed in the article.  It's my job as a buyer broker to get this information and all disclosures to them as quickly as possible.  And, by the way, in our long days on market, a disclosure a year old isn't going to cut it.  I'll want a new one.

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Taos Real Estate

Really, this is good advice for any market, not just in Taos real estate shopping.  Realtor.com ran a short post about what to look for in shopping for condos.  The gist of the article is to carefully examine the condominium association documents, budgets and other financial information.  Just because a condo project looks healthy and well-occupied doesn't mean that this is the case.

With a single family home, you're pretty much in control of a lot of things that you can't control in a condo project.  With the pooled fees, maintenance and improvements are dependent on a properly structured budget, and condo owners that are paying their dues on time and in full.  Too many in arrears, and critical functions can be threatened...that is unless and until other owners have to increase their dues to make up the difference.

In today's more restrictive lending environment, lenders scrutinize condo projects carefully, as they lose some control as well.  They are denying loans if too many units are owned by one entity, or if more than 15% or so of owners are behind in their payments.  As a buyer broker, I don't just deliver condo docs and wait to see if you object to any of the items in them.  If you thoroughly understand them and don't need my help, great.  But, I want my clients to know that I'm ready to go over every document, and ferret out other information if necessary to make sure that the project's finances are in good order.

Related articles by Zemanta

• Condos to be auctioned at steep discounts (seattlepi.com)
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Even more of a possible conflict of interest is present when the agent you're working with as a buyer is negotiating on your behalf to purchase their own listing. New Mexico law requires that they provide disclosures to both you, the buyer, and their seller that they're working now only as a "middleman," or a transaction facilitator. In other words, they now don't aggressively represent either you as a buyer, or their seller. They merely take care of the details, move the paperwork, and try to stay neutral as far as influence and strategic help in the negotiation.

This is in itself a problem, even if they manage to stay neutral and as fair as possible to both sides. Neither side is then receiving the representation they really need, with no aggressive investigation of true value for the buyer, or hard bargaining for the seller. Even more of a possible perceived conflict of interest is the double commission situation. It's really heavy pressure to keep a deal on track, with neither buyer nor seller encouraged to take tough negotiation positions for fear of losing the deal entirely.

It's been rough going in the Taos real estate market for a year or so. However, the last normal year I had, I advised two out of three of my buyers to leave deals due to unfavorable terms, pricing, or property situations with easements or septic issues. Some ended up buying other properties, and others decided to buy in Santa Fe and other areas. It was lost income to me, but they appreciated the help in avoiding situations they could have regretted later.

Now, as a buyer brokerage, Gallery Realty of Taos has no listings, and thus can never be in a situation that creates any possible perception of a conflict of interest in representing both sides in a deal. I'm free to be a buyer advocate in the very best way.

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Of course, this leaves the buyer in a precarious position, as they are really not represented at all, and the agent showing them properties is required to try and help the seller get the highest possible price for their property. For this reason, most states have done away with sub-agency. In New Mexico, I do receive a split of the commission offered by the seller through their listing broker. However, I owe no allegiance or fiduciary responsibility to the seller. I am working solely in the best interests of my buyer.

As the Internet has brought about change in the way real estate is marketed, buyer agency has become more necessary in my opinion. There are so many websites out there that display listings. The information they display can come from many sources, taxing government records, or even from for sale by owner information entered by the seller. A few, like Realtor.com, actually display listing information directly from local MLS's (Multiple Listing Services). However many, such as Trulia.com and Zillow.com, get their information from a variety of sourcs.

The accuracy of listing information found on the Internet varies from the best (from regulated MLS's) to the worst, entered directly by sellers or from out of date tax records. I believe that, as a buyer broker, a large part of the value I provide to a buyer customer/client is my understanding of the local market and my knowledge of which of the online resources you can trust, and which you cannot. I also find that Taos real estate has some very unique characteristics in the areas of easements, septic systems, and topology. Helping my buyers to avoid problems, make their best deal, and buy with confidence in their resale prospects is very important to me.

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Buyer brokerage, if done properly, does not allow the taking of listings. The fact that you could be showing your buyer one of your brokerage's listings is viewed by some as a possible conflict of interest. I agree, as the fact that commission income would be doubled could very easily influence the actions and decisions of a broker.

I want my buyer customers to know that I'm working completely in their best interests, as I will never be taking them to my listings. I also want to let all buyers know that I work for the stated shared commission in the MLS, and that any bonuses offered by the seller will be rebated to my buyers. I want not even a hint of the perception that I may be showing a certain property before or instead of others due to a bonus offered.

Gallery Realty of Taos, the new Buyer Brokerage in Taos, NM.

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Using the Internet to Work Where You Want

In an article titled High-Earners Choose to Work Where They Want, Realtor Magazine Online speaks to a growing trend for those earning high incomes to take their work to resort and vacation home markets.  This is due to advances in technology, giving them the ability to operate from a home in an area they prefer.

Using the Jackson Hole, Wyoming area as an example, the article states that their demographics have changed dramatically from a second home market to a market with 75% growth in full time labor force.  At the prices in that area, these aren't hospitality industry workers for the most part, but those who are able to work remotely via the Internet on jobs and business in states all around the country.

This is obviously a plus for the Taos real estate market as well, but we must pay attention and make sure as sellers that we've marketed the availability of DSL or other high speed broadband access to our listed homes.  If you don't have DSL, at least check to see if "line-of-sight" high speed is available from providers like Kit Carson and TaosNet.  If high speed Internet access is available, make sure that all of your marketing materials indicate that, even down to mentioning the speed of the connection.  It's a really big deal to the high income buyer who must bring their work here with them.

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Recovery in Taos real estate isn't about the national trend.   Taos real estate sales will rebound in a trickle-up way.  And, it won't be quick I think.

I'll stick by my "Dow at 9500 means buyers will return" posts.  However, who knows when the stock market can get there.  What is more obvious, to me at least, at this point, is that there is already a bottom-up improvement in the Taos real estate market.  But, it's just a shadow of previous good times.

Here's an article that poses a possible "bottom in the markets."  Right now, homes at the low end of the Taos real estate pricing spectrum are moving.   There is a watching audience, and when the price drops to the right level, they're being scooped up.  Another one yesterday that I've been watching for a year, finally hit the magic number, and it's under contract.  These tend to be in the low $200k range at this point.

So, there are two major opinions discussed by those wanting to buy, sell or broker real estate in Taos, NM.

• We're in for another year, into 2010, without improvement in the Taos real estate market ... they're right.
• We're seeing improvement right now that will continue ... they're right.

What we'll see, in my opinion, is an increase in number of sales, but not much of an increase in dollar volume.  This will be brought about by an increase in pricing concessions mostly on the lower end.  And, until the rest of the economy looks brighter to those who still have a little money to buy a vacation or retirement home, price concessions in the $400k up range (a big part of our market) will have to get pretty aggressive to lure a buyer.

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