Congratulations! You are in the final stretch! However, the joy of finalizing the real estate deal brings with it the stress of financial planning. Closing costs in New Mexico are a sum of expenses you should plan for when buying or selling a house.
Key Takeaways
- Closing costs or “settlement costs” are a set of final expenses paid for completing a real estate transaction.
- The seller and the buyer both pay closing costs in New Mexico.
- The 3 major Seller Closing Costs in New Mexico are:
- 1. REALTOR Fee
- 2. Recording Fee
- 3. Escrow Fee
- The 3 major Buyer Closing Costs in New Mexico are:
- 1. Loan Origination Fee
- 2. Escrow or Impound Account
- 3. Appraisal Fee
- In New Mexico, real estate transactions are usually closed by escrow agents and title companies.
What are Closing Costs in New Mexico?
Closing costs in New Mexico are a sum of fees that have to be paid to different stakeholders. Closing costs are essential for finalizing the real estate deal and transferring ownership of the house. These settlement costs are paid in addition to the net property amount.
Who Pays Closing Costs in New Mexico?
Both the buyer and seller pay certain closing costs at the end of the real estate transaction in New Mexico.
The seller shells out a higher monetary amount as closing costs as they pay the REALTOR commission. Other fees, like documentation charges, transfer fees, etc., are paid by the buyer.
Some closing costs are negotiable, while others are non-negotiable, like taxes charged by your state or local jurisdiction.
Depending upon the conditions of the New Mexico real estate market, the buyer or the seller can negotiate their share of the closing costs. For example, in a buyer’s market, the seller may have to bear a portion of the buyer’s closing costs.
Who Pays Closing Costs on FSBO in New Mexico?
For Sale By Owner (FSBO), property sellers do not have to pay heavy real estate agent commissions. Further, if they sell New Mexico home with a flat fee MLS, they can save a significant amount of seller closing costs. However, they will have to pay certain closing costs. Some of these are:
1. Transfer Taxes
Transfer tax is generally charged by the state and/or municipality before the ownership is transferred from the seller to the buyer. States like New Mexico, Texas, Utah Wyoming, North Dakota, Montana, Mississippi, Alaska, Indianan, Louisiana, and Missouri do not charge transfer tax like some of the other US states.
2. Seller’s Attorney Fees
The law in New Mexico does not mandate the presence of an attorney for FSBO real estate transactions. However, it is highly advised to hire a real estate attorney for FSBO deals to avoid any type of legal risk.
A real estate attorney guides the owner in preparing the necessary documents like the seller’s disclosure in New Mexico and drafts of other legal paperwork.
» Sell My House on My Own New Mexico: Here’s how to sell a house without a realtor in New Mexico.
3. Pre-listing Appraisal
FSBO sellers may have to invest in the pre-listing appraisal, as it would help them find an appropriate buyer in less time. This will, in turn, lower the number of days on the market and make the sale faster.
» Home Appraisal Fee New Mexico: Read more about this New Mexico closing cost.
How Much are Closing Costs in New Mexico?
The closing cost in New Mexico for sellers is approximately 8%–10% of the home’s agreement value, while the buyers are expected to pay around 2%–5% of the home’s purchase price.
Let’s put this in perspective! The median home value in New Mexico is $299,814. So, if you are selling a house in New Mexico, you may have to pay $23,985 to $29,981 as closing costs. On the other hand, if you are buying a house in California, your closing costs may range between $5,996 to $14,990.
How Much are Closing Costs for Sellers in New Mexico?
As mentioned above, when selling a house in New Mexico, you will have to pay some closing costs to legally transfer the house ownership to the buyer. These costs include several fees that need to be paid over and above the net price of the property.
Some seller closing costs are negotiable. Real estate agents in New Mexico usually have information about who pays what at closing and can help you save on closing costs.
Here are some of the prime seller closing costs in New Mexico.
1. REALTOR Fee
The seller pays real estate commissions to both the listing agent and the buyer’s agent.
So, how much are realtor fees in New Mexico? New Mexico real estate commissions usually amount to 5%-6% of the agreement value.
» How To Negotiate Real Estate Commission: Check out this blog to find how to negotiate REALTOR commissions like a pro!
2. Recording Fee
The recording fee is paid by the seller to make the real estate transaction a matter of public record. In New Mexico, the recording fee ranges from $600 to $700 across different counties.
3. Escrow Fee
An escrow agent is an unbiased third party who helps you and the buyer complete the transaction. They clear the house for sale, transfer the ownership to the buyer, and the respective funds to the seller.
The escrow fee is the remuneration charged by the escrow agent for their services.
4. Home Inspection Fee
Sellers can opt for a home inspection to identify any major defects and issues, like plumbing issues, water damage, mold, appliance malfunction, etc., in the house that they must resolve before selling.
This can be done before the property is listed on the market (pre-inspection) or just before the closing. The average home inspection cost in New Mexico is around $400-$600.
The buyer can also undertake a home inspection. However, if the New Mexico home inspector finds undisclosed defects, it might give the buyer an upper hand during negotiations, or they may back out of the deal.
» How Much are Sellers Closing Costs in New Mexico: Get a detailed overview of closing costs for sellers in New Mexico.
How Much are Closing Costs for Buyers in New Mexico?
These are the closing costs paid by the buyer while acquiring the property ownership from the seller. Like seller closing costs, these too are negotiable. Hence, hiring a buyer’s agent can help you save on closing costs.
We have listed some of the prime buyer closing costs.
1. Loan Origination Fees
Some New Mexico mortgage lenders charge buyers a loan origination fee to execute the loan with other respective documentation and legal formalities. The loan origination fee usually amounts to 1% of the mortgage loan amount.
2. Mortgage Escrow Account/ Impound Account
A part of the buyer’s monthly mortgage payments is reserved in an escrow or impound account by the mortgage lender. This reserve is maintained to pay the property tax and homeowners insurance premiums.
A mortgage servicer manages the mortgage escrow account and makes the payments on behalf of the buyer.
3. Appraisal Fee
Appraisal fees are paid to the professional appraiser who assesses the home value and ensures you get the best competitive price.
The cost for home appraisal in New Mexico varies between $300 and $500, depending on the property characteristics like its actual saleable area and its geographical location.
» Average Closing Cost in New Mexico for Buyer: Here is a detailed breakdown of closing costs for buyer in New Mexico.
4. Title Insurance
A title company offers title insurance to protect the insurer against any type of loss with respect to any outstanding taxes, unpaid dues, default in the title, or any violations. A policy of title insurance in NM could cost around $200-$250.
» How is Title Insurance Calculated in New Mexico: Find out more about this closing cost to protect your investment in FL.
5. Land Survey Fee
A land survey is mandatory by law for buyers in New Mexico & Florida. The cost of a land survey may start from $250 and go further depending on the size of the land.
How are Closing Costs Calculated?
It is important to calculate closing costs while selling a house or buying one.
The estimated closing costs give sellers an idea about the home equity they will have after the sale and helps buyers find out the amount they will have to pay over and above the agreement value of the house.
» Closing Cost Calculator: Check out the closing costs calculator for calculating the closing costs for your real estate transaction.
How to Calculate Closing Costs for Seller?
Houzeo’s Home Sale Calculator helps calculate closing costs for sellers in New Mexico with a swish and a click! All the sellers have to do is enter their property location, home sale price, mortgage payoff, seller agent commission, and buyer agent commission and voila!
The Seller Closing Cost Calculator even gives sellers an estimate of their home inspection fee and home warranty fee. With the help of this home sale proceeds calculator, sellers can find out their home equity and be prepared for closing.
» New Mexico Seller Closing Cost Estimate: Check out the seller closing costs calculator for calculating the closing costs for the seller.
How to Calculate Closing Costs for Buyers?
Houzeo’s Buyer Closing Cost Calculator helps calculate closing costs for buyers in New Mexico. For finding the estimated buyer closing costs, the buyers have to add the property location, home purchase price, and the down payment in the buyer closing cost estimator.
The closing cost calculator for buyers gives a detailed list of the buyer’s estimated closing costs.
Home buyers can find out everything right from origination fees, appraisal fees, and survey fees to the title search, attorney fees, recording fees, prepaid interest charges, escrow property taxes, and owner’s title insurance.
The Buyer’s Closing Cost Calculator even shows which fees have to be paid before closing and which ones have to be paid at closing while buying a house in New Mexico.
» Buyer Calculate Closing Costs in New Mexico: Check out the closing costs calculator for a buyer for calculating the closing costs for the buyer.
Closing Costs in New Mexico for Refinance
Before we dive into closing costs for refinance, let’s look at the term refinance:
What is Refinancing?
Refinance, also called “Refi,” is nothing but replacing your current loan with one that offers a lower rate of interest. This helps lower monthly mortgage payments.
How Much are Closing Costs in New Mexico for Refinance?
Refinancing closing costs are the sum of several expenses paid against any services that were used in the process of underwriting and closing on your mortgage loan, which makes up 3%-5% of the mortgage amount.
The closing cost for refinancing would vary with respect to the property’s location. Overall, New Mexico mortgage refi closing costs are the highest in the nation.
Junk Closing Costs to Watch Out For
Junk costs are the additional costs that are imposed by the mortgage lender. These are usually excessive but can be challenged and negotiated for a fairer price. Some of these are:
- Application Fee: The buyer pays this fee to the lender when applying for the mortgage. Not all lenders charge an application fee.
- Loan Processing Fee: This fee is charged by the lender to execute the loan once it has been approved. Borrowers can negotiate for these charges to be waived.
- Mortgage Rate Lock Fee: This fee is a guarantee that the lender will honor the pre-agreed interest rate for a said amount for a set period.
- Underwriting Fee: Mortgage underwriters charge an underwriting fee to evaluate and verify loan applications. It is a non-recurring fee. Some lenders charge it in place of the originating fee, while others charge it in addition to the same.
- Courier Fee: A fee of $20-$50 is typically charged in order to cover the courier transactions.
Note: The costs vary by region.
Conclusion
The closing cost in New Mexico is the mandatory fee that needs to be paid by the seller & the buyer. This is paid over and above the mortgage loan amount. Where the buyer pays 2%-5% and the seller pays 6%-10% against their share of the closing cost.
If you have just started planning to sell a house and are considering NM For Sale By Owner, we encourage you to get in touch with us. Houzeo.com is the best and most advanced flat-fee MLS service that can help you get eyes on your listing without the need for an agent.
Houzeo’s customer-centric approach, advanced technology, and flat fee packages make it an ideal choice for those looking to avoid paying high commissions and closing costs.
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Frequently Asked Questions
1. How much are closing costs in New Mexico?
The closing cost in New Mexico for buyers are approximately 2%–5% of the home’s agreement value. While the sellers are expected to pay around 6–10% of the home’s purchase price. For sellers, that includes the agency commission too.
2. How much are closing costs in New Mexico for buyer?
The buyer closing costs are the charges paid by the buyer while acquiring the property ownership from the seller. These charges included several fees that need to be paid over and above the agreement amount and are negotiable too. Hence, you would need the best listing agent that would benefit you in this deal.
3. How much are closing costs in New Mexico for seller?
The seller closing costs are the charges paid by the seller while transferring the property ownership to the buyer. These charges included several fees that need to be paid over and above the agreed amount and are negotiable too. Hence, you would need the best listing agent that would benefit you in this deal.
Also Read
- Who Pays Closing Costs When Selling a Home in New Mexico: Closing costs vary according to the type of real estate deal. Find out which NM closing costs you are liable for.
- How Long Does a Foreclosure Take in New Mexico: Here is ALL you need to know about foreclosures in New Mexico.
- New Mexico Certified Home Inspections: Home inspection is a crucial step in real estate transactions. Read to know more.
- Low Commission Broker: Lower your closing costs by opting for a low commission broker in Florida.
Additional Resources
- Sell a Home New Mexico: Here is a comprehensive guide on how to sell a house in New Mexico.
- Buy Houses in New Mexico: Becoming a homeowner is a dream for many. Here’s how to make it come true.
- New Mexico Flat Fee MLS Listing Service: Save money on your closing costs by using a flat fee MLS company in New Mexico.
- How to Flip a House in New Mexico: If you want to flip houses and make a profit in New Mexico, we explain what you need to know.
- REALTORS in New Mexico: Looking for Realtors in New Mexico? We have the ten best options in 2023 ready for you.
Eager to Know How Houzeo Works?
We’ve got you covered. Check out the following video to understand how Houzeo works and why it is one of the best For Sale By Owner websites in the U.S.
» NEED MORE CLARITY? Read these exclusive Houzeo reviews and learn why it is one of the best website For Sale By Owner in America.
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