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Sep 04, 2023 Are real estate agents in New Mexico really agents?

Gary Sandler

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Published 4 September 2023

According to the Association of Real Estate License Law Officials (www.arello.org) there are approximately 3 million individuals in the U.S. who currently hold active real estate licenses. According to the National Association of Realtors (NAR), about 1.6 million, or 53 percent, of those folks are Realtors. Closer to home, the New Mexico Real Estate Commission (NMREC) reported that 11,100 New Mexicans currently hold real estate licenses. Of those, 7,611, or just under 69 percent, are Realtors. So, what’s the answer to the question posed in the headline?

The basics are simple. Everyone in New Mexico who holds a real estate license, irrespective of whether he or she is a Realtor, 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 69 percent who choose to carry the Realtor designation opt to become members of one of New Mexico’s 15 local realty boards, the New Mexico Association of Realtors, and the National 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 who are bound to the code of ethics.

In New Mexico, the real estate license law statute 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 real estate 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 – not unlike a lawyer. 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 to a maximum price and terms authorized by the principal.

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. To make sure agency relationships don’t develop accidentally, the law requires that they be memorialized in writing.

In a nutshell, most buyers, sellers, landlords and tenants 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, sell or rent; the minimum duties brokers must provide, the types of brokerage relationships that are available to them, and the type of relationship – agent or transaction broker – into which they are about to enter.

Well, there you have it. Most people work with licensees, who are Realtors, and typically act as transaction brokers. Now that you know how to refer to your broker, agent, Realtor or whatever, have you ever thought about how he or she refers to you? If you sign a listing, buyer-broker, property management or agency agreement with a firm, you’re a client. Working without a written agreement makes you a customer.

See you at closing.

Gary Sandler is a full-time Realtor and president of Gary Sandler Inc., Realtors in Las Cruces, New Mexico. He loves to answer questions and can be reached at 575-642-2292 or Gary@GarySandler.com.

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