Buyer's Frequently Asked Questions

If you are buying directly from a seller, no you do not need a broker. Having one will increase costs, since they are paid based on sales price. You and the seller may hire a real estate attorney, or complete the transaction on your own.

If you are buying from a seller that is listed on the MLS through a flat fee lister, you may or may not use a real estate broker. The MLS listing will indicate how much your broker will earn at closing. If you do not use a broker, there will be an opportunity to get a lower price however.

If the property is listed by a full service, traditional broker, yes, by all means, use your own buyer broker, since there are no financial incentives to not using one. If you do not have your own buyer broker, the seller’s broker gets to keep the full commission (rather than sharing it with your buyer broker). Also note that their obligation is to advocate for and protect the seller at your expense.

A buyer agent is an agent whose fiduciary responsibility is to the buyer, rather than the typical scenario in which a showing agent owes allegiance to the seller. This is often misunderstood by buyers since the showing agent may not even know the seller.

A buyer agent is typically paid by the listing broker via the co-broker fee.

Typically, most purchase agreements have several “outs” for the buyer. For example, buyer does not get final loan qualification, buyer discovers something unsatisfactory during the home inspection process,  the property does not appraise at agreed upon price. With each of these scenarios, most purchase agreements state that buyer will get their earnest money returned. If buyer fails to provide one of these reasons, seller may want to retain buyer’s earnest money.

This is negotiable. Typically, sellers want 1% of sales price.

Most lenders need 30-45 days once they receive a signed purchase agreement.

Absolutely yes! This is one of the most important of your due diligence responsibilities. Home inspections are typically “visual” inspections, but none the less, you may discover several issues with the home that you can now ask the seller to cure before closing. The purpose of home inspections is to minimize your risk. Ask the seller for a disclosure statement prior to the inspection, so that you can share issues with the inspector, and get his/her opinion on remedy.

New Mexico is a non disclosure state. This means that home sales information is not public information. Public websites such as Realtor.com and Zillow.com offer estimated home values. Be careful since they often are inaccurate. The best way to determine a home’s value is to speak with an appraiser or a real estate broker. Perhaps one of these professionals will help you find comparable, sold properties for a small flat fee.

That depends on your income and your financial obligations. Meet with a mortgage lender to assess your financial situation. Often, lenders qualify buyers for more than the buyer is comfortable with, so use a mortgage calculator to play with some “what if” scenarios.

Ask yourself some basic questions such as: Am I rooted in the community for at least 5 years, or will I be moving before that time? Are prices low enough now that even if I sell in less than 5 years, do I think I’ll make money (even considering closing costs?) Do I have enough money saved for the down payment, and loan fees, and home maintenance costs? Would my house payment be less than my rent, even considering taxes, insurance and home maintenance costs? Do I enjoy home maintenance? Am I handy? Do I like yard work?

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