The New Mexico Real Estate Commission has voted unanimously to rescind the language in a controversial real estate rule that set service requirements for real estate licensees in the state. A commission task force will continue to study the issue.

Despite objections from the U.S.

The New Mexico Real Estate Commission has voted unanimously to rescind the language in a controversial real estate rule that set service requirements for real estate licensees in the state. A commission task force will continue to study the issue.

Despite objections from the U.S. Department of Justice’s Antitrust Division, commissioners had passed a rule change in February that required real estate brokers in the state to accept and present all offers and counteroffers to their clients in every real estate transaction and to provide assistance to clients in “developing, communicating, negotiating and presenting offers, counteroffers and notices that relate to the offers and counteroffers until a lease or purchase agreement is signed and all contingencies are satisfied or waived.”

The rule, which was not implemented, would have banned real estate businesses from providing some forms of limited service to clients such as the entry of a property into a multiple listing service without any additional representation in a transaction.

Across the country, state legislatures and real estate commissions have considered similar rule changes that are typically promoted by Realtor trade groups as pro-consumer measures that can ensure that consumers receive adequate services in real estate transactions while eliminating confusion in transactions that involve representation from both full-service and limited-service real estate companies.

In a handful of cases, U.S. Justice Department and Federal Trade Commission officials have opposed such measures, charging that the measures can reduce consumer choice and stifle competition in the industry by targeting alternative business models. Several states have passed the measures despite federal opposition.

In a November letter to the New Mexico Real Estate Commission, the Justice Department requested that commissioners reject the proposed real estate rule change in that state. The rule changes “are likely to reduce consumer choice, increase real estate services prices and undercut incentives to innovate,” the letter states. “As we have encouraged other state commissions and legislatures, we encourage you to reject rules that could harm New Mexico home sellers and home buyers.”

The Justice Department has also cited an absence of consumer complaints against fee-for-service real estate companies in New Mexico in questioning why minimum-service rules are necessary.

And Justice Department antitrust officials took issue with a provision of the rule changes that would have defined Virtual Office Web sites — a format for the sharing of online property data among real estate brokers — as a form of advertising.

Commissioners delayed consideration of the rule change until February, when they approved the changes. And commissioners last week considered whether to implement the new rules. Wayne Ciddio, executive secretary for the commission, could not be reached for comment today.

Linda Marquette, vice president for the commission, said the potential for legal action likely played a role in the commission’s decision to rescind the language in the rule change.

“We started the process mainly to raise the bar forlicensees in the state of New Mexico. We do, basically as a commission, believe that a licensee has certain duties and requirements more than just listing a property in the MLS. That we all agree on. We didn’t intend to bring the Justice Department down on us and open the can of worms. We just don’t have the resources to fight the United States government,” Marquette said.

“We created a task force to study the issue since it’s a national issue. It’s a lot bigger than we realized,” she added. Marquette, who has experience as a title and mortgage professional, is the state commission’s public representative — the other four members work in the real estate brokerage industry.

A task force will likely be in place in time for the commission’s next meeting in September, Marquette said. “We really want to move on this issue. This is not one that we want to go away.”

Gary Wallace, a Realtor for Sotheby’s International Realty in Santa Fe, N.M., who spoke during the commission’s hearing last week, said he has personally experienced problems working with home sellers who do not receive full representation from their real estate company in a real estate transaction.

In one instance, Wallace said the seller appeared “ill-prepared to discuss what the house could be worth, knew nothing about the regulations and furthermore didn’t know how to do a counteroffer.” The transaction with Wallace’s client, who was interested in purchasing the property, eventually fell through, Wallace said.

There is room for limited-service companies in the industry, Wallace said, though real estate professionals should provide some services to clients. “I think it’s important that consumers have choice. I just think they shouldn’t be thrown to the wolves,” he said. “I just hope that decision (on the minimum-service rules) … is made soon so it’s not hanging out there on a limb.”

Wallace said there didn’t appear to be any representatives from limited-service real estate companies at last week’s commission hearing.

Lisa Hebenstreit, who offers limited-service real estate services in the Albuquerque area, said she is pleased that the commission has rescinded the rule change. “I think it’s the right decision for consumers. I think that’s a good idea.”

Hebenstreit said she has had conversations with the commission’s staff and with Justice Department officials to discuss her opposition to minimum-service requirements. She said she was not aware that the rule change would be discussed at last week’s meeting or that the commission was forming a task force to further study the issue.

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