Yes. The people we all thought were our real estate agents were likely not our agents at all. This is clearly stated in those contracts that people generally don't read. That doesn't make them bad people, of course, but brokers in NM and other states that have adopted this model have benefited from the public's ignorance of the broker's true role.
Transaction brokers are legally prohibited from giving their clients information that might make a huge difference.
For example, if you’re a buyer, your transaction broker is not allowed to tell you the seller’s motivations for selling, whether the seller indicated they’d accept a lower price, or if they’re open to financing terms other than the ones offered. If you’re a seller, your transaction broker is not allowed to tell you the buyer’s motivations or whether the buyer is willing to pay more than the initial offer.
Some transaction brokers will still disclose the above information out of a desire to do right by their client, further indicating that the transaction broker role does not really meet clients' needs.
Has it always been this way?
No. In NM, the law changed overnight in 2005. One minute, the default relationship between broker and client was a fiduciary one, and the next minute the default relationship was a non-fiduciary one.
Colorado and Florida were the first states to recognize transaction brokers in the 90s. The National Association of Realtors fought back, saying that this change in role would result in lower commissions for brokers. Indeed, surveys from the time showed that most people expected to pay a lower commission to brokers who were not agents with fiduciary duties to their clients. Alas, commissions not only stayed the same but continued rising.
What if I want an agent?
Some real estate brokers will serve as agents when asked, so you have to explicitly ask for it. There is no agency relationship unless you have a signed contract that creates one.
