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Published October 23, 2016
The Association of Real Estate License Law Officials (www.arello.org) estimates that there are approximately 2 million people in the U.S. who currently hold active real estate licenses. According to the National Association of Realtors (NAR), about 1.2 million of those folks are Realtors. Closer to home, the New Mexico Real Estate Commission (NMREC) reports that around 8,500 licenses are currently active in the state. Roughly 5,500 of that number are Realtors who belong to the Realtors Association of New Mexico (RANM). Both nationally and statewide, upwards of 60% to 65% of all real estate license holders have chosen to become Realtors. So what’s the answer to the question?
The basics are simple. Everyone in New Mexico who holds a real estate license is a licensee and subject to the New Mexico Real Estate License Law (61-29-1 to 61-29-29 NMAC for you lawyer-types out there). The sixty-five percent who choose to carry the Realtor designation opt to become members of NAR, RANM and one of the 19 local realty boards and associations operating throughout the state. Realtors in our area typically belong to the Las Cruces Association of Realtors. In addition to being subject to state and federal laws, Realtors are also subject to NAR’s strict Code of Ethics, which provides effective mechanisms for self-policing, handling consumer complaints, providing educational opportunities, and scores of other services that benefit both Realtors and the general public. In the end, all Realtors are licensees but not all licensees are Realtors.
In New Mexico, the real estate license law attributes to license holders no fewer than a dozen possible titles and designations. The list includes Qualifying Broker, Associate Broker, Licensee, Designated Agent, Dual Agent, Responsible Person, Sub Agent, Transaction Broker, Property Manager, Broker-in-Charge, Inactive Broker, and Facilitator. Notably absent from the list are salesperson and Realtor. So, what do you call the licensed person sitting across the desk from you? Most buyers and sellers refer to him or her as their salesperson, agent, broker, Realtor, or some pet name that is best left to the imagination. The monikers are all interchangeable.
Irrespective of how you describe your representative (another moniker?), in the eyes of the law there are only two types of brokers in New Mexico; Qualifying and Associate. A Qualifying Broker (QB) owns or runs a realty firm (Realtor or not) and is responsible for all the licensees working under his or her control. Associate Brokers are the licensees who work under the QB’s authority. All brokers, irrespective of status, represent buyers and sellers as either a Transaction Broker or an agent, depending on the situation and desires of the parties.
The legal differences between Transaction Brokers and brokers acting as agents are significant. A Transaction Broker assists buyers and sellers, treating each equally and fairly without being the agent of either party – a facilitator if you will. An agent, on the other hand, owes additional fiduciary duties to his or her principal. A Dual Agent curiously serves two masters. One example of an agency relationship would be where a principal engages a broker to autonomously negotiate on the principal’s behalf.
Fiduciary duties create, among other things, a legal pathway between the agent and principal that could result in the principal being responsible for actions taken by the agent. Such is not the case in the vast majority of transaction brokerage situations, hence its popularity. To make sure agency relationships don’t accidentally develop, the law requires that agency agreements be memorialized in writing.
In a nutshell, the vast majority of buyers and sellers work with brokers or salespeople who are acting as Transaction Brokers. Irrespective of status, all licensees are required by law to disclose in writing to people who are about to buy or sell something both the minimum duties brokers must provide and the types of brokerage relationships that are available to them in New Mexico.
Well, there you have it. Most people work with licensee-brokers, who became Realtors and typically act as Transaction Brokers. Now that you know how to refer to your broker, agent or Realtor, have you ever thought about how he or she refers to you? If you sign a listing, buyer-broker or agency agreement, you’re a client. Working without a written agreement makes you a customer.
See you at closing.
About author
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About Author
Gary Sandler
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