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Should I buy or rent?
Some people buy a vacation home with the idea of turning it into a permanent
retirement home down the road. Others like the tax benefits or wish
to expand or diversify their investment portfolio. Most people who decide
to buy in New Mexico understand that this is a special place and have
come to love it here. Owning brings the benefit of having your own place,
becoming part of the community, blending into the daily fabric of the
island, and living in all its seasons. Ownership brings great benefits,
but also the responsibilities of home management and maintenance.
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Is now a good time to buy? What do you think the
market will do?
Although the Fall of 2001 saw significant changes in our economy, New
Mexico is still experiencing an active real estate market. Pricing has
adjusted somewhat to current market conditions, resulting in a moderate
softening of prices. There is a slight increase in the number of available
listings, providing potential buyers with greater choice of properties
from which to select. Additionally, interest rates are at, or near,
20-year lows. These factors combine to make this a great time to buy
in Albuquerque
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What costs I will encounter with
a second home?
As with ownership of any property, there are mortgage, utilities, insurance,
and maintenance and repair costs. If you’re thinking of renting
your property, or using the property seasonally, it’s best to have
an on-island property manager or caretaker who can check in on the property
and deal with issues that arise. If you’ll be renting the property,
you will also have agency commissions associated with each group of
tenants. Many owners prefer to have lawn care and cleaning services
to keep the place in ready-to-use condition.
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Are there tax benefits to owning
a vacation home?
Today, a home or vacation home can be purchased for investment purposes
as well as enjoyment. And yes, there are tax benefits. Visit www.irs.ustreas.gov
or talk with your tax planner for information on the tax benefits of
owning a second home.
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Are there other tax considerations of which I should
be aware?
Yes, in addition to the state
taxes, which vary depending on the area you buy in, some
communities have local taxes
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Who does the Real Estate Agent work for?
In New Mexico, the state mandates that real estate brokers disclose
their agency representation to you. Before showing you any properties,
a broker must disclose their representation and have you sign a form
that confirms that you have been properly notified. An agent may be
a Buyer’s Agent, or a Seller’s
Agent. Be sure you clearly understand
the representation of any agent you work with.
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If I am looking to buy a property with the intent of
using it as a rental, where should I buy?
If you’re planning to use your property exclusively for investment
purposes (rentals) you should consider the University Area, where students
prefer to rent. However, the most important consideration is to choose
a property you think is a good value, in a location that appeals to
you.
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What does it mean when a property is listed as Exclusive?
Listing properties in New Mexico varies from most other markets, in
that a seller may list their home one of three ways. An Exclusive
Listing, is when the property is contracted with one agency
who works to find buyers, and oversees advertising and promotions. With
Shared Listings two agencies offer
the same home for sale, which may result in the same property being
advertised slightly differently by two different firms. With a Tri-Listing
three different agencies market the property simultaneously.
As a potential buyer, any New Mexico agent can show you almost any property
available, whether or not they are the listing agent, even if it’s
an exclusive listing. In a few rare situations, very high-end properties
may be offered privately to select agency customer lists, but by far
the majority of the properties available will be included in the multiple-listing
service
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What’s the difference between an Offer and a Purchase
& Sale?
The Offer is the legal document, which is signed by both parties when
a buyer and seller agree on the initial terms of the sale. The Purchase
and Sale is a more detailed, lengthy legal document, which is often
executed after certain contingencies (such as inspection) have been
completed. When either document is signed by both the buyer and seller,
they constitute a legally binding agreement. Be sure to consult with
your attorney before signing any legal documents.
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What’s the difference between the assessed and
appraised value of a property?
State law requires that all real estate is assessed at full market value,
and all properties are re-appraised at least every three years. Generally,
professionals are employed to make these appraisals, basing assessments
on actual sales 2-years preceding to establish values as of January
1 of the re-appraisal year. The assessed value of a property is used
to determine property taxes.
The appraised value of a property is the current market value of the
property as determined by a professional appraiser and reflects sales
prices of comparable properties within the prior six-month period.
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What is a covenant?
Properties which are in historic districts or that are part of neighborhood
associations, may be subject to certain covenants. These are restrictions
which must be adhered to by all residents of the area and may include,
use or building restrictions, siting or sizing guidelines, and behaviors
which have been agreed upon by the association or commission. Covenants
help to maintain a consistency within an area and protect its’
value.
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Who is responsible for road maintenance?
If your road is paved, it is probably maintained by the town. Unpaved
roads are maintained by the local neighborhood association if one exists,
or by the individual property owner.
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How long will it take for my property to sell?
There are three main variables that affect the length of time a property
is on the market: the price of the home; the condition of the home;
and the current market conditions. The seller can affect the first two
of these variables—an appropriately priced home in great condition,
with fresh paint and all details in order, will have appeal to many
potential buyers and is more likely to sell more quickly—even in
a slower market. For more information on what to expect when you’re
selling visit the Sellers
section of the site or talk with me.
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