The final stage of selling your home comes with a number of expenses that help complete the sale. Sellers in New Mexico pay about 1-3% of the closing costs, while the buyer will pay 3-4%.
It's important to note that these costs don't include realtor commission fees, which average 6% of the sale price and are paid by the seller. This means that when you sell your home, you'll actually need to pay between 7% and 9% on closing day.
With such significant expenses, you'll want to save money wherever you can in the process.
Since commissions will be the bulk of your selling costs, it pays to get connected with top-rated agents in New Mexico who will sell your home for a fraction of the cost.
Clever Partner Agents offer their full services while saving up to 50% on commission fees.
So, what can you expect to pay in closing costs when you sell your home in New Mexico? Let's take a look.
What are closing costs?
Closing is the final step of the arduous process of selling your home.
On closing day, paperwork is signed, funds are exchanged, and ownership of the property is officially transferred to the buyer. The process is carried out by a third party, such as a title company, escrow agent, or attorney, who ensures the terms of the sale agreement are met and all payments are furnished.
Closing costs are the various fees and payments for the individuals and services involved in completing the sale. For the seller, they also include paying off any outstanding balances on the home.
How much are closing costs in New Mexico?
For sellers in New Mexico, closing costs typically total 1-3% of the home's sale price.
Remember that this doesn't include realtor commissions, which average 6% in New Mexico, bringing your closing day bill to 7% to 9% of the sale price.
If you're looking to lower your overall costs, a low commission agent is a great way to save on fees.
How to Calculate Your Closing Costs in New Mexico
How much can you typically expect to spend at closing? The amount will depend on your property value, but you can use home data from your area to get a ballpark idea. Let's look at an example.
The median home value in New Mexico is around $196,800 (as of August 2019), according to Zillow. Using this amount, you can estimate that you'll be responsible for $1,968 to $5,094 in closing costs (1-3% of the sale).
One thing to note, tools like Zillow's Zestimates can be a good starting point, but it's only as good as the data available in a given area. As such, its accuracy varies from county to county.
The most effective way to calculate the value of your home is with a comparative market analysis (CMA). Talk to a realtor who can produce a CMA and net sheet, which will give you a better sense of how much you'll take home after the sale.
What's included in New Mexico closing costs?
Here's what typical closing costs look like in New Mexico.
Title search: $300-$600
The title search checks to verify that you are the legal owner of the property. It also makes sure that there are no outstanding liens or judgments against the property.
Title insurance: Varies, $1,000 on average
The buyer and the lender usually require title insurance in order to protect them in case a claim on the title arises after the sale. The cost varies, but averages around $1,000.
Home inspection: $300-$500
Most lenders require a home inspection, which checks to make sure there are no major issues with the home's structure or systems.
Home Appraisal: $450-$650
A home appraisal verifies the home's condition and value. Lenders use an appraisal to ensure that the property is worth the amount the buyer is requesting to borrow. If they determine it is not, they won't provide the loan.
Since they go directly to the appraiser for his work, appraisal fees are nonrefundable, even if the buyer is unable to secure the loan.
Survey: Varies, around $450
A survey examines the property in order to determine its legal boundaries, also called property lines. Costs vary depending on the size of the lot, but average around $450 in New Mexico.
Credit report: $25-$50
This fee is for the lender to check the borrower's credit score and history.
Loan payoff costs: Varies, around 0.5-1.5% of the sale price
These fees are for the buyer to secure a mortgage. They include loan application, assumption, and origination fees, and prepaid interest covering the time between closing and the first month's mortgage due date.
Mortgage payoff and prepayment penalty: Varies
At closing, the seller will pay off any remaining balance on their mortgage.
Some lenders assess a penalty for paying your mortgage off before the end of its term. Prepayment penalties vary, so check with your lender to see if you would be penalized.
> Learn more about prepayment penalties and selling a home with a mortgage.
Outstanding amounts owed on the property: Varies
These can include outstanding costs such as property taxes, utilities, homeowners insurance bills, and HOA fees. These costs are prorated so the seller is responsible until the closing date.
Recording fees: Varies
Recording fees cover the cost for legally recording the new deed for your property with the county. These fees vary from county to county.
Settlement fee: Varies, around $2 per $1,000 of the sale price
Closing in New Mexico is typically carried out by a representative from a title company or escrow agency. The settlement fee goes to this company for facilitating the sale.
While an attorney is not required at closing, you can bring your own attorney to the closing table. Attorney fees vary.
Other Home Selling Costs in New Mexico
Remember that when you sell your home, there are expenses beyond closing costs that you'll need to budget for.
If any major defects arise during the home inspection, you'll need to repair them or credit the buyer. There are also minor costs to prep and stage your home, like covering nail holes or repainting walls.
Realtor fees can be a big expense when finishing up the sale of your home. In New Mexico, these average 6% of the sale price in total, and as the seller, you'll be on the hook for both agents' fees.
Who pays closing costs in New Mexico?
Buyers and sellers each pay some of the costs at closing. Occasionally, a buyer may ask you to cover some of their costs, so it's important to familiarize yourself with the fees typically paid by each party.
Typical Seller Closing Costs
The seller's typical costs include fees to transfer ownership and paying off bills and mortgage balances. They include:
- Mortgage payoff and prepayment penalty (if applicable)
- Outstanding amounts owed on the property, such as HOA fees and utilities
- Recording fees
- Settlement fees
Typical Buyer Closing Costs
Most costs for the buyer are focused on securing a mortgage and purchasing insurance on the home. These include:
- Loan origination fee
- Loan application fee
- Credit report fee
- Title search fee
- Lender's title insurance
- Home inspection fee
- Appraisal fee
- Prepaid interest
- Survey fee
- Settlement fee
Should you pay the buyer's closing costs?
Typically, this is usually done in a cooler market as a way to entice buyers. Since New Mexico is a hot seller's market, it may not make a lot of sense for you to make concessions right now.
However, buyers and sellers are allowed to negotiate fees in New Mexico, and whether you cover any of the buyer's closing costs is up to you. Down payments and closing fees can be big obstacles to buying a home, so if it helps attract potential buyers to make concessions, it may be worth it.
An experienced real estate agent can advise about how to market your home most effectively.
Key Takeaways for New Mexico Home Sellers
When you set out to sell your house, it's very difficult to know exactly how much you'll walk away with once the process comes to an end. But in most cases, you should expect to part with at least 1-3% of the final price in closing fees, plus agent commission fees, and possibly other costs, such as repairs.
Speak with a real estate agent, attorney, or tax advisor who can guide you through the process. They can give you an accurate idea of just how much your home can sell for — and what kind of costs you'll need to budget for.
One great way to save money in the process is to work with a low-commission real estate agent.
At Clever Real Estate, we connect home sellers with top-performing agents across New Mexico, who charge a flat listing fee of only $3,000, or 1% if the sale is over $350,000. This way, you pay a fraction of the usual commission price, while getting all the services you expect from an experienced real estate agent.
Get in touch with Clever to set up a free, no-obligation consultation with an experienced agent to learn how you can save thousands on your home sale.