Technical Stuff You Need to Know
About New Mexico Real Estate Transactions
The Meaning of a “Transaction Broker”
If you’re going to buy or sell real estate in New Mexico, you should understand the term “transaction broker.”
New Mexico law defines a “transaction broker” as a licensee who provides real estate services without entering an agency relationship. The absence of agency confuses some investors familiar with real estate deals elsewhere.
General agency law provides that an agent can bind the principal. Restated, a buyer or seller who has an agency relationship with a broker may have authorized the broker to act on behalf of the buyer or seller. Not so a transaction broker. A transaction broker cannot legally obligate a buyer, seller, lessor, or lessee in New Mexico .
Does the absence of an agency relationship mean that “buyer beware” is alive and well in New Mexico?
No. New Mexico brokers must comply with mandatory Broker Duties required by the New Mexico Real Estate Commission.
Before the first document in a transaction is signed, New Mexico brokers are required to provide the customer or client Broker Duties cover sheets related to the document. In fact, most commercial brokers begin explaining Broker Duties as soon contact is made between a broker and customer or client. Significantly, Broker Duties are owed to all -- repeat, all -- participants in a transaction, not merely to the person the broker is dealing with.
Want a sample of the New Mexico Broker Duties? Ask and I’ll send you one.