Buying a New Mexico Home: What Does the Seller's Disclosure Form Tell Me?

If you are considering purchasing a home in New Mexico, you face a number of challenges. You must determine your price range, search for towns and neighborhoods, dig through listings, and attend countless open houses. And when you finally find your dream home—whether it’s a condo in Albuquerque or a big suburban home in Sante Fe—that’s when the real worries begin.

Not only must you negotiate with the seller over the price, but you must also determine whether the home is really worth what the seller is asking for it. How do you know that the home is in good condition?

Fortunately, New Mexico, like most states, requires that the seller disclose certain conditions about the home to potential buyers. These disclosures are meant to warn you of any serious defects in the home’s condition, such as leaky pipes, bad ventilation, or friable asbestos. New Mexico further requires the seller to disclose some information about the taxes and legal status of the home. What disclosures are you entitled to, as you begin the process of purchasing a home in New Mexico?

Disclosure Laws in New Mexico for Home Sales

The general requirements of home sellers' disclosures are covered in New Mexico Statutes § 47-13 et seq., also known as the Real Estate Disclosure Act.

The good news for you is that the statute is fairly comprehensive. The seller must provide you with a written disclosure of all “material defects” in the property about which the seller has actual knowledge. Material defects are generally understood to be major problems that would affect the use, value, or enjoyment of the home. (A scratched door frame is not a material defect! But a cracked structural beam or leaky roof would likely be).

The law requires that the New Mexico seller give this disclosure statement to you before the two of you sign a purchase contract. This timing is sensible, since once you learn of any severe defects with the property, you might wish to renegotiate the price or back out of the sale entirely.

Interestingly, New Mexico’s disclosure statute focuses heavily on tax issues. According to New Mexico Statutes § 47-13-4, before accepting your purchase offer, the seller must: “(1) request from the county assessor the estimated amount of property tax levy with respect to the property and… specify the listed price as the value of the property to be used in the estimate” and “(2) provide a copy of the assessor's response… in writing to the prospective buyer or the buyer’s broker.” The law further requires that the seller explain in writing how the county assessor or local clerk calculates the property taxes. These are helpful rules, since you would not want to move into the home only to be shocked by your property tax bill!

New Mexico statute does not contain the text of a specific form that the seller must fill out (as some states' statutes do), but the New Mexico Association of Realtors has created a sample form that contains all of the necessary information. It is possible that the seller’s real estate agent or attorney will propose a differently formatted disclosure form.

The form asks whether the seller is “aware of” a series of legal of physical problems with the property. For example, has there been any history of wood infestation, insects, pests, or tree root problems? Are there any outstanding liens on the property, or any easements? Are there any issues with the cooling system? Do the major appliances work?

Is the New Mexico Disclosure Form Comprehensive?

The New Mexico statute is clear that a seller who does not have any actual “awareness” of problems in various areas of the home can answer “no” or “N/A.” This means that if the seller never uses the swimming pool, he or she can honestly say that there are no known defects with the pool pump. New Mexico can get hot! Relying on the seller's untested knowledge is a pretty big risk for you to take.

Moreover, remember that some sellers may even be intentionally dishonest. They may say that they have no idea of any problems with their perfect home, when they know for sure that the lights barely turn on. While such sellers are the exception, you should always be circumspect.

In short, New Mexico homebuyers like yourself are lucky, in that the state has created extensive disclosure requirements. Yet a homebuyer is always smart to hire an expert inspector to conduct independent inspections before closing. An independent inspector is typically a licensed professional who will explore your potential new property for problems. This is standard practice when purchasing a property. The inspection may reveal a serious defect, perhaps one that was unknown or undisclosed by the seller, which will cause you to rethink the sale or renegotiate its terms.

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