According to the Association of Real Estate License Law Officials (www.arello.org), approximately 2 million people in the United States have active real estate licenses. According to the National Association of Realtors, approximately 1.5 million, or seventy-five percent, of these people are real estate agents. Closer to home, the New Mexico Real Estate Commission reported that just over 10,000 New Mexicans hold real estate licenses. Of those, 7,637, or just under 77 percent, are realtors who belonged to the New Mexico Association of Realtors. So what’s the answer to the question posed in the title?
The basics are simple. Anyone in New Mexico who holds a real estate license is a licensed real estate licensee and is subject to the New Mexico Real Estate Licensing Act (61-29-1 through 61-29-29 NMAC for you lawyers) . The 77 percent who choose to carry the real estate agent designation choose to become members of NAR, NMAR and one of 17 local real estate boards and associations operating statewide. Real estate agents in our area usually belong to the Association of Real Estate Agents of Las Cruces.
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In addition to being subject to federal and state laws, real estate agents are also subject to NAR’s strict code of ethics, which provides effective mechanisms for self-monitoring, dealing with consumer complaints, providing educational opportunities. and many other services that benefit both real estate agents and the general public. Ultimately, all real estate agents are licensees, but not all licensees are real estate agents.
In New Mexico, the real estate licensing act gives licensees as many as a dozen possible titles and designations. The list includes a qualified broker, an associate broker, a license holder, a designated agent, a double agent, a responsible person, a sub-agent, a transaction broker, a real estate manager, a responsible broker, an inactive broker and a facilitator. Notably absent from the list are the seller and the real estate agent. So what do you call the authorized person sitting across from you? Most buyers and sellers refer to him as their seller, agent, broker, realtor, or some other name best left to the imagination. The nicknames are all interchangeable.
However you describe your representative (another nickname?), In the eyes of the law, there are only two types of brokers in New Mexico who regularly work with buyers, sellers, owners and tenants; qualified and associate. A Qualified Broker (QB) owns or manages a real estate company (real estate agent or not) and is responsible for all licensees working under their control. Associate brokers are the licensees who work under the authority of the QB. All brokers, regardless of their status, represent buyers and sellers either as a transaction broker or as an agent, depending on the situation and the wishes of the parties.
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The legal differences between transaction brokers and brokers acting as agents are significant. A trading broker helps buyers and sellers, treating everyone equally and fairly without being either party’s agent – a facilitator if you will. An attorney, on the other hand, has additional fiduciary duties to their principal, much like a lawyer. A double agent curiously serves two masters. An example of an agency relationship would be where a principal engages a broker to negotiate independently on behalf of the principal.
Fiduciary duties create, among other things, a legal channel between the agent and the principal which could result in the principal being liable for actions taken by the agent. This is not the case in the vast majority of transactional brokerage situations, hence the popularity of transactional brokerage. To ensure that agency relationships do not develop accidentally, the law requires that they be commemorated in writing.
In summary, most buyers and sellers work with brokers or sellers who act as transaction brokers. Regardless of their status, all licensees are required by law to disclose in writing to persons who are about to buy, sell or lease; the minimum fees that brokers must provide, the types of brokerage relationships available to them and the type of relationship they have with the broker who manages their transaction.
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Good, you have it now. Most people work with licensees, who have gone on to become real estate agents and generally act as transaction brokers. Now that you know how to refer to your broker, agent, real estate agent or whatever, have you ever thought about how he or she refers you? If you sign a listing, buyer-broker, property management or agency contract, you are a client. Working without a written agreement makes you a customer.
Meet at the fence.
Gary Sandler is a full-time real estate agent and President of Gary Sandler Inc., Real Estate Agents in Las Cruces. He loves to answer questions and can be reached at 575-642-2292 or Gary@GarySandler.com.
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This article originally appeared on Las Cruces Sun-News: Is Your Real Estate Agent Really Your Agent?