What Taos Real Estate Buyers Want

As a buyer in an unfamiliar market, there are things that you want and expect to happen. And, there are things that you need to happen, however you may not be aware of some of those. I wanted to write this post to help buyers in the Taos real estate market to crystallize their desires and needs in order to make an informed decision about a real estate professional to work with in Taos. Let's look at some of the things buyers tell me they want from a real estate professional when buying in the Taos real estate market.

• Someone working ONLY in their best interests
• Someone who knows the market, and has a statistical knowledge of what's happening
• Someone who will help them to dig out the best opportunities
• Someone who will keep them out of trouble with title and other issues peculiar to this market

What Taos Real Estate Buyers Need

Perhaps a little overlap here, but there are also things that Taos real estate buyers need during their search and purchase process.  Sometimes they haven't thought about these needs, or they had no idea that they're important.

• If there's surface water on or adjacent to the property, buyers need a buyer broker who will look out for their water rights and make sure they understand them
• For subterranean water rights, or well permits, buyers need a broker who will make sure that all state regulations are followed and permits obtained
• Buyers need a broker who actually READS their title insurance binder documents and brings important matters to their attention and to the attention of the title company and an attorney if necessary
• Buyers may need a buyer broker willing to show them FSBO, For Sale by Owner, properties
• Buyers need a buyer broker who cannot end up in a conflict of interest because the brokerage lists a property in which the buyer is interested.

It's that last need that should be of particular interest.  The larger a brokerage, and the more listings, the greater the chance that a buyer will want to purchase a property listed by the brokerage they're working with.  In fact, there's a definite tendency of brokerages to show their listings first.  Whether it's a desire to help their seller, a goal of doubling their commission, or a combination, it's a situation that happens all too often in the Taos real estate market.

For the absolute best situation, and no chance of any conflicts of interest, buyers should work with a brokerage with no listings.  As a dedicated Buyer Brokerage, Gallery Realty of Taos, meets all of the desires and needs of Taos real estate buyer clients.  There's never a chance of "serving two masters."  When you survey the Taos real estate market, you'll find that there are few choices for exclusive buyer brokerage.  Most brokerages want to list as well, as there is a lot more business to do.  It's not a dishonest position at all, just the way the business works.

However, if you want the business to work SOLELY in your best interests, work with a Taos real estate buyer only brokerage, and Gallery Realty of Taos would like your business.

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.

BLM Road Access When the BLM Wanted No Part of It

While this situation didn't really have a negative impact on my buyer at the time, documenting the details could help her to avoid a problem in the future.  In Taos Canyon, there are small stretches along the highway where BLM land extends down from the ridges to touch the main highway.  In this case, my client was buying land that had road access across about 100 feet of BLM land, a narrow strip right at the road.

As soon as I noticed this in the survey, I asked if the seller had a permit to cross this land, and was told that they didn't even know that it was BLM land.  Even more interesting, a trip to the BLM office turned up the same answer:  "we don't have a road in that area."  I pressed the issue and one of their people took a trip out there to investigate.  We traded emails, and he did state that indeed they did own this strip of land, but had not constructed the road, wanted no part of maintaining it, and didn't have an interest in monitoring or regulating use of this small piece of road.  He called me to tell me this, but I requested follow-up in writing.  He did so, and I have all of this documented in the file and in the records given to my client.  If the issue comes up later, she'll be the only person out of dozens of owners up that road with this record of BLM statements.  This may never come up, but if it does, see the next story.

Changes In County Government - Taos Real Estate Permit Problem

While I believe that years of problems at county level related to Taos real estate property development in the Deer Mesa area of Valdez are finally resolved, that wasn't the case three years ago when my client purchased land there.  Because of the way it was originally subdivided many years ago, there have been ongoing issues and disputes related to lots in this beautiful area.  Lawsuits have been involved, and purchases there required careful research.

Though the seller of this parcel had a letter from the County Attorney, it was two years old.  While the same person was still holding that position, we required as a contingency of the purchase that the seller get a new letter reflecting the ability of the buyer to get a building permit in the current situation.  The attorney provided an updated letter.

Eight months later, when my Taos real estate client applied for a building permit, a new person held the County Attorney position, and he immediately declared the entire area as an illegal subdivision, stating that no building permits would be issued until compliance with current subdivision regulations.   I showed our letter to the current attorney, but we were told that the new rules would apply, and no building permit would be issued.

My buyer hired a local Taos real estate attorney, and he immediately asked me if I had anything in writing that stated that my buyer based their final purchase decision on the ability to get a building permit and the letter we received.  I'm paranoid, and my clients usually like that fact.  In receipt of the new letter, I had forwarded it to my client with the statement that we could now go forward with the purchase, as our main criteria of getting a building permit had been satisfied.  The county never came to court, as my client's attorney adequately proved that the buyer had a right to expect government documents to be binding, and that the decision to purchase was based on this expectation.

This Taos real estate buyer got their building permit.

However, if your access into Taos real estate property is across BLM or other government land, pay attention to whether there is a valid permit to use that access, and if there are any costs associated with it.  This story is about an out-of-state buyer who worked with me in trying to purchase a stunning parcel of land, only to walk away from a deal after the price was agreed upon.  It was all about access across about 300 feet of BLM land on an un-maintained dirt road.

This Taos real estate acreage met all of my buyer's requirements, with trees and magnificent rock formations.  We also had expectations of cutting a pretty good deal, as it had been on the market for more than 400 days when we made the offer.  A price was agreed upon quickly and the purchase agreement accepted by both parties with the normal contingencies.

What became apparent rather quickly was that new environmental rules were going to be a problem.  Normally, the BLM will grant a permit to cross land to allow a property owner access.  If the road is one that's maintained, there may be terms in the permit that allow the BLM to bill the land owner if the road is damaged by their access, but that's usually not a problem either for Taos real estate residential use.

The problem in this case involved the fact that the seller had not asked for this permit before the property was listed.  In that 400+ day interim while on the market, the rules changed.  Now, that two day no-cost process had become one of many months and several thousand dollars.  New environmental studies were required to make sure that using that dirt track road would not damage the environment or animals and vegetation.

It was unfortunate, as this Taos real estate buyer did not want to wait, and moved on to buy another property.  If you're considering a property bordered by government land, that value plus can become a negative if access across that land is required.  Use a thorough Taos real estate buyer broker for your transaction.

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.

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.

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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.

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.

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.