It isn’t as if real estate is the only profession that enjoys a good dose of its own dedicated lingo. I think you find that in every industry, sport, or hobby. My daughter recently picked up horseback riding and I’m pretty sure she’s speaking a foreign language when she tries to discuss riding technique with me. But, I thought it might be helpful (or at least of passing interest) to talk about a couple of terms that are fairly basic to real estate in the State of New Mexico.
Yep. Realtor. Lots of people know this one. But, did you know that the word “Realtor” is a trademarked label belonging to anyone who is an active member of the National Association of Realtors (NAR)? While it would be unusual to hear a home inspector or a mortgage broker or an appraiser call themselves a Realtor, they actually could, as long as they’re an active member of NAR. So, while real estate brokers (or agents, we’ll get to that in a minute) can be Realtors, not all Realtors are real estate brokers. If you want to learn a little more about Realtors, you can find some bits and pieces here. Or, you can go to the NAR website here if you’d like to look up a list of Realtors in your area.
Here’s the thing. In New Mexico, we don’t call ourselves agents. If you think that’s a bit odd, don’t worry. You’re not alone. Here in Los Alamos we get a lot of folks moving here from other parts of the country. They’re used to working with real estate agents. And that’s what they’re looking for when they call. Now, if you want to get super technical, there are ways to create agency here in New Mexico. But if you go to the NM Real Estate Commission’s website, they aren’t going to talk to you about agents. They’re going to talk to you about brokers.
And THAT is where people from outside the area scratch their heads. In other states, a real estate broker is a step up from an agent. The broker’s license requires more education, a few more tests, and a lot more responsibility. Never fear. The NM State Board has come up with a way to differentiate between what other states might call an agent and a broker.
Here in New Mexico we are called Associate Brokers (or just brokers) and Qualifying Brokers. The simple explanation is that an Associate Broker is licensed to do just about everything you need to buy or sell property here in New Mexico. I’m an Associate Broker. We go through 90 hours of pre-licensure education that includes not only real estate basics, but also an ethics course. We need 36 hours of continuing education every year to keep our license current. And we have to know a heck of a lot about the local, state, and even national laws that apply to our job.
Now. The Qualifying Broker has that same background, but they also have an administrative section to their educational requirements. From a reciprocity standpoint, the Qualifying Broker is equal to a Real Estate Broker in most other states. But to be honest, New Mexico is pretty strict about their real estate licensure laws. Our state only recognizes official reciprocity with Massachusetts, Louisiana, and Georgia. That means if an “agent” from another state wants to move to NM or just to add a NM State Real Estate License to their resume so they can do business here, they have to go through a minimum of 30 hours of education before they take the test to get their license. And the board doesn’t care how long you’ve been handling real estate transactions wherever you come from either. You’ve got to provide them with your educational background and your license history to apply for your NM State License.
What does all of THAT mean?
Well, it means that we real estate brokers take our job pretty seriously. It means we’re more than capable of handling all of the intricacies of buying or selling property in the Land of Enchantment. Not that any one part of our state is the same as another. Which is why I’m so focused on Los Alamos. This county is unique. Our market isn’t like anywhere else. And that means I’m your Local Real Estate Expert. Give me a call today!
John and Jane Doe were such a nice couple. They’d lived in Los Alamos for decades. Recently John had retired from LANL and with the kids and grandkids living in Florida, it seemed the perfect time to retire to a much smaller home in a warmer climate.
John and Jane listed their house for sale and were eager to see what sort of nice, young family might move into the place and fill it with laughter and children. They’d kept up with the maintenance on their Barranca Mesa home, making repairs when necessary and updating here and there. John was a pretty handy guy and enjoyed home improvement projects.
Enter Mark and Mary Smith. A young family new to the area, Mark had just been employed by LANL and the couple was looking forward to raising their two young children in such a wonderful small community. Purchasing the house on Barranca Mesa would stretch their budget, but Mark and Mary had been looking at real estate in Los Alamos for over a year and this house was the first one they’d really fallen in love with. By crunching the numbers and making some adjustments to the family budget, Mark and Mary were able to make an offer on the house.
The purchase process was a whirlwind! There were a few minor repairs necessary after the inspection, but within sixty days the young family was moving out of their tiny apartment and into their lovely new home. John and Jane Doe could not have been happier for Mark and Mary Smith. The fall temperatures would soon give way to winter and John and Jane were glad to be packing their things and moving to Florida before the first freeze of the year. They were looking forward to a stress free retirement.
Moving is always a bit hectic, but Mark and Mary enjoyed making the new house into their family home. There were a few minor issues of course. Aren’t there always? A week or two went by. The temperatures started to dip a little lower. And Mark and Mary soon started to notice that their hot water heater wasn’t doing a good job with keeping up with their family’s needs.
Mark isn’t a DIY kind of guy, so he called a repairman. The repairman explained that the hot water heater was older and sediment build up inside had decreased its capacity. Mark and Mary had known that owning their own home would come with maintenance costs. The cost of a new hot water heater seemed within their means and they decided to go for it. After all, they could get a newer, energy efficient model and probably cut their energy costs and have far more hot water available for their growing family.
During the Doe’s long years owning the house, John had enclosed the hot water heater into a set of storage cabinets in the back of the utility room. The cabinets created a lot of handy space, but they also made it rather difficult to work on the hot water heater. The workmen disassembled the cabinets and got to work. And THAT is when they found a very unpleasant overgrowth of nasty mold that seemed to be growing beneath the hot water heater and all they way up the wall. The workmen took the rest of the cabinets apart and discovered the mold stretched the entire length of the utility room.
Hot water heater installers don’t do mold remediation. The contractor called Mark at work and told him it was time to call in a professional to handle this issue. Mark hung up with the contractor and called his real estate broker. It had only been two and half weeks since they’d closed on the house. Surely, the seller had some responsibility for this issue?
Mark and Mary’s broker took another thorough look at the disclosure statement for Mark and Mary’s home. There was no mention of problems in the utility room that could have led to a mold issue. The broker then contacted John and Jane’s broker and asked if there had ever been repairs in the utility room or problems with the hot water heater. It took several days for John and Jane’s broker to reach them in Florida.
John and Jane Doe were shocked to hear about the mold in their former home. Of course they’d had no idea that there was a mold issue in the house. After some thought, John remembered that he’d had an issue with the plumbing fixture on the hot water heater, but it had been a simple fix. A few new fittings from Metzger’s had stopped the tiny leak. John couldn’t imagine why he and Jane would have needed to disclose a leak that had happened nearly eight years ago and had been repaired without further incident.
Meanwhile back on Barranca Mesa, Mark and Mary were horrified to hear that their mold problem was going to cost eight thousand dollars to fix. The contractor at the restoration company explained that the tiny leak had only looked tiny. And while the leak was indeed repaired, the water had seeped down into the subfloor and up into the drywall and would require a complete remodel of the utility room and part of the ceiling and flooring above.
Mark and Mary contacted their broker. Surely they weren’t responsible for all of this damage if it came from a leak that happened before they owned the home? Besides, they didn’t have eight thousand dollars to pay for the mold repair!
John and Jane didn’t know what to do. Surely they weren’t responsible for all of this damage if the home inspector didn’t find it during the inspection? The leak was fixed. The hot water heater was working just fine when they sold the house!
That’s the thing. Nobody is right and nobody is wrong. As to who is responsible? That could be determined by the local courts if the buyer decides to take the seller to court for nondisclosure.
Here is the lesson. Disclose. Disclose. Disclose! I cannot tell my clients enough times to disclose EVERYTHING. What repairs did you make to the house while you were there? Did you hire contractors? Were there permits pulled for the work? Were there things done to the house prior to your ownership? So many times sellers are tempted to put their home’s best foot forward. After all, if there weren’t any lingering defects from a project, why is it a big deal?
I think my little story tells you exactly what the worst case scenario could be. Poor Mark and Mary Smith! Had the disclosure statement mentioned a hot water heater leak, the inspector could have been tasked with more thoroughly inspecting that cabinet in the utility room. He very likely would have found the mold problem. Would they have bought the house? Probably. But they would have likely come in with a lower offer that would have left them with the cash to make the repairs.
Poor John and Jane Doe! They’re in Florida trying to enjoy their retirement! If they had just listed the hot water heater leak and repair on the disclosure statement, there was no way someone could accuse them on hiding anything. Did they knowingly hide a mold issue? Of course not. Had they realized that there was a huge home improvement project looming, they could have either fixed it themselves (possibly with the help of their home insurance policy) or they could have lowered their asking price to allow for the repair.
This is the takeaway, folks: The sale STILL would have happened. It just wouldn’t have caused so much upset afterwards. So once again…
Yes. When it comes to the question of whether or not to use the services of a real estate broker to sell your home or not, I have what you might call a biased opinion. But, having said that, I can also be real with potential clients. And looking at the Los Alamos County real estate market right now, you might be asking yourself, why on earth would you ever need a Realtor to sell your house? Houses are selling like Tickle Me Elmo during the Christmas season of 1996! Everyone you know has heard of someone that they know who has a friend, who has a cousin, whose house had a massive bidding war and went for thousands over the asking price!
Newsflash.
Some of those things are true. But just because the market is moving doesn’t mean the services of a professional broker aren’t needed. In fact, it can mean that you’re more in need of a licensed professional than ever. Here are a few things to think about if you’re considering a FSBO home sale.
FSBO (For Sale By Owner)
The FSBO trend has been around for generations. Stick a sign in the ground, handle all of the phone calls and marketing yourself, and do your own negotiating. You get to find the right buyer willing to pay the right price. You are intimately involved in every aspect of your home’s sale. From the first moment that potential new homeowner gets your number off the sign or the Craigslist ad until you’re handing them the keys and congratulating them on their new purchase. It can sound like a really great idea.
The number one reason why? Well, because you don’t have to pay a real estate commission to the brokers, right?
Let’s think about that for a moment. This can be a big deal. Nobody likes the idea of handing over five or six percent of their home’s equity to a third party. In some markets this can be the difference between breaking even at closing or having to bring money to the table to literally pay someone to take your house off your hands.
But that’s not our market here in Los Alamos. At least not right now. In fact, from a buyer’s perspective, it might be even more tempting to try and purchase a house without using a broker in our local market. It’s tempting to believe that leaving a Realtor out of the equation might result in a lower cost on a house in a market with a hefty median price.
Except those two concepts don’t really go together. Both the buyer and the seller can’t save a big chunk of change. Yes. They can save the commission. I typically charge six percent. On a $300K home that could be $15K. It’s not a small number. And yet, the popular Real Estate Information website, Keeping Current Mattersreports that a study by Collateral Analytics suggests that broker listed homes netted an average of 6% more than homes that went for sale by owner.
Even if we suggest that you’re only breaking even in a financial sense by using a broker to sell your home, you might want to really consider what buying and selling a home actually involves.
No really. How much time do you have? If you’re buying a house, there’s a good chance you’re either out of area, getting settled in our beautiful little town, trying to get your kids situated in new schools, navigating a new job, or dealing with another huge life change. Even if you’re local, you’re probably trying to prepare for a move, which can be a logistical game of Twister.
If you’re selling your home, you’re probably doing exactly the same things in the opposite direction. The market here in Los Alamos has a breathtaking turnaround rate. There is a reason why people make jokes about real estate professionals being constantly on the phone. We are.
Marketing
The amount of money I spend every year on marketing would be absolutely ridiculous if it weren’t for the fact that I work in an industry that is almost entirely driven by my marketing. But in reality, it’s like anything else in our modern world. There are databases and networks and subscriptions. Never forgetting the power of social media. I work with companies and professionals in all facets of this giant machine to create a customized marketing campaign for each home I list. Add in the new pandemic restrictions and the realities of selling real estate in a Covid-19 world and online marketing has suddenly taken on a whole new meaning.
My question to anyone considering a FSBO situation is this. Are you honestly prepared to showcase your home in a digital world? 3D tours, Zillow, Facebook, paper marketing, and every other modern advertising concept that can get your home in front of a potential buyer? For some sellers, the answer might be yes. So many Average Joes out there possess digital savvy that I truly envy. If that’s not necessarily you, I realize that it’s easy right now to comfort yourself with the notion that you could probably skip all of that and just stick a few signs outside and advertise an Open House.
Perhaps. But do you really want dozens upon dozens of people wandering through your home and your family’s personal living space during a time when we’re not even supposed to gather in groups of more than five people whether we are indoors or out? More and more homes are selling sight unseen. Buyers realize what a pandemic means and they’re making adjustments. If you’re selling your home it means getting creative. If you’re buying a home it means navigating the world of airbrushed photos, professionally produced 3D tours, and flowery language as you try to decide if this space is right for you while essentially shopping online for your next home. Let’s just say the return policy on a house can leave a little something to be desired.
Okay. The last thing I want to talk about is the negotiating. Buying or selling a home can be tense. It’s sometimes tempting to think you’d feel better by having all of those little things under your control. After all, if you can see everything that’s happening you might feel less stressed. Right?
It’s easy to forget that part of what you’re paying your broker for is their network of “people to get that done”. Are you ready to negotiate with a potential buyer or seller about home inspections and appraisals? Even if you’re selling your home FSBO, you’re likely to get plenty of brokers calling you about your home. In a market like ours where every house matters, that’s a given. Are you prepared to negotiate with a professional who is working hard for their client? It might be tempting to think to yourself that it’s like paying half the commission you would have otherwise just to have someone deal with the paperwork. But remember that the buyer’s agent is working for them and not you, or vice versa. It’s like representing yourself in front of a judge in a legal matter when the other side has an attorney.
Speaking of legal matters, that’s another thing to keep in the back of your mind. In our modern market, the legalese and requirements surrounding things like disclosure (I’ll talk about that in another blog, I promise) and lending practices can be more than just tricky. Dealing with lenders and title companies can leave the most levelheaded individual spinning in circles. Don’t ask me how much time I spend on the phone making sure someone emailed someone else regarding paperwork labeled X,Y,& Z that is absolutely required to be at Location A before a 3:00 PM closing appointment.
Maybe You’re Ready
I’m not going to tell anyone that they aren’t ready to dive into this process if that’s what they want to do. That’s not my intention at all. If you’re chomping at the bit to try your hand at buying or selling a home without using a broker, then I’m the one standing on the sidelines cheering you on. I’ve known plenty of people on both sides of that equation. Those who have had excellent FSBO experiences and those who haven’t. If you’re ready, do your research and go to it! These are just some things to think about when you’re considering a real estate transaction. If you’ve ever experienced a FSBO situation, you’ve probably got a dozen more bits and pieces of advice to add.
As always, happy house hunting! And if you’ve got questions, please give me a call! I would love to chat with you and sometimes the first part of making the choice to work with a broker or go with a FSBO is to talk to a local real estate professional and see what your options are. You might be surprised how much information you can get from one phone call…
Winter in the desert. It actually sounds like a break, right? People typically think of the desert as being hot and dry and maybe windy. So, winter would be cooler and maybe include some moisture. Not that we’re going to get rid of the wind…
But the reality of winters here in Los Alamos County isn’t always about cooler temperatures. I don’t think I have to remind anyone of that crazy 2018-2019 winter when you couldn’t even entice a tow truck to come up here to pull your car out of a snow drift and we were suddenly learning about things like “back up snow removal storage sites”.
Snow might or might not be on the horizon. If you’ve been a long time resident of Los Alamos or even someone who has gone through several winters here, you know that predictions are rarely spot on or even close. Some winters we have moisture, others are dry as a bone. But somewhere in all of those maybes are a few good thoughts about how to get YOUR yard ready to weather the coming winter whether it is wet, dry, or other.
Mulch
Many people have a bit of a love hate relationship with mulch. It’s not as polished looking as rock. It comes in a variety of qualities, colors, sizes, etc. You can get it for free at the Transfer Station here in Los Alamos (and they’ll load it onto your truck or trailer for $3.00/yard). But no matter how you feel about mulch, there is a good chance you can use it to help your outdoor plants survive the winter looking their best.
For starters, mulch is all about insulation and moisture. Because of this, you want to apply mulch BEFORE the ground freezes for the winter. Now. I realize that we had that bout of snow already, but the ground has warmed sufficiently that you could get out there and mulch around your shrubs and trees before the winter weather is here to stay. Applying mulch to your plants is only the first step though. After that you want to soak the ground as much as you can (while remembering the water rules) up to the point where the mulch and the soil freeze. The idea is to promote as much root growth as possible and to keep the plants from doing the freeze and thaw cycle. Adding mulch too late or too early in spring, can cause the ground to thaw and the plants to start their spring heave toward the surface only to be smacked down by another cold front.
Pruning
I have to say that I can totally understand the desire to clip off all of the dead growth on your plants in the fall. But you can increase the health of your plants and help them better survive winter by waiting until late winter or early spring to do your pruning.
Exception!
If you have a tree or large shrub that has limbs in danger of breaking off during a heavy snowfall, then you should certainly get out there and take care of that. Another situation that requires pre-winter pruning are rose bushes or other flowering shrubs with long stems or “canes” that get whipped around in the wind. Trim those back so the plant doesn’t damage itself in bad weather.
For the most part though, the long stems, even though they’re dead, are used by the root system to stay healthy in bad weather. Stems and dead foliage can also catch and hold excess snow to promote insulation of the core of the plant during severe cold spells. So as much as you might be tempted to whack everything off in the fall, you might want to consider putting off that chore until spring.
Leaves
Here in Los Alamos, we don’t necessarily have an excess of leafy trees like you might have seen in others areas such as the Midwest. But we do have some. Here is a thought when you’re trying to decide whether or not you want to bother with raking up the mess. A thick bed of leaves might work as an insulator for your plants, but it also makes a fantastic breeding ground for plant damaging insects. While mulch tends to harbor a “healthier” variety of insects dedicated to the decomposition process and adding nutrients to the soil, leaves provide a great place for problem insects to winter. Their eggs and larvae stay cozy and fed and erupt in the spring to become an even bigger nuisance.
Soil Deficiencies
If you have any fruit trees on your property, you might want to think about iron deficiencies in your soil. An iron deficiency can be responsible for not only yellowed foliage on certain plants and shrubs, but also poor tasting and sparse crops of fruit on fruit trees. Fall is the perfect time to add something like Greensand to the area around the base of your plants. Check out the information here for more about iron deficiencies.
No matter how you choose to get ready for winter, I hope you enjoy this gorgeous fall weather that we’re having. And remember, for all of your local real estate tips, questions, and especially answers, feel free to contact Kendra via email or phone.
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