What’s the Average New Mexico Real Estate Commission Rate?

Does the agent get to keep the full commission?

Although the seller pays the entire commission, the listing agent, representing the seller in a transaction, doesn’t keep it all. Part of their commission will go toward marketing your property with professional photography, open houses, offline marketing, and more.

The commission is also typically split 50/50 with the buyer’s agent to compensate them for bringing a buyer to the sale and coordinating the buy side of the transaction. So, 3% goes to the listing agent, and the other 3% goes to the buyer’s agent.

The listing agent and the buyer’s agent will then share a percentage of their commission with their sponsoring broker.

These split rates can vary; however, it’s common for the listing agent to give their broker anywhere from 30%-50% of their commission, depending on the agent’s experience level, market size, and brokerage agreement.

How is the commission divided between agents?

The commission that’s paid by the seller will typically be split between each agent and the brokerages through which they hang their real estate license. Suppose you sell your home for $344,000 with a 6% commission rate. You pay a commission of $20,640, and each agent has a 70/30 split agreement with their brokerage. Here’s how that might look:

• Listing agent: $7,224 (70% of their $10,320 commission share)
• Listing broker: $3,096 (30% of their $10,320 commission share)
• Buyer’s agent: $7,224 (70% of their $10,320 commission share)
• Buyer’s broker: $3,096 (30% of their $10,320 commission share)

You may balk at the $20,640 commission and want to negotiate for a discount. As Leyba states, “A seller can always negotiate the commission. They can always request less commission. But what I tell my clients, one of the things you have to take into consideration is when someone that discounts their commissions, you are going to receive a discounted service.”

Are New Mexico commission rates negotiable?

As Leyba notes above, you can negotiate real estate agent commission rates, but don’t be surprised if your agent holds firm on how much they charge. A Consumer Federation of America report found that only 27% of agents are willing to negotiate the commission. The other 73% may have good reasons not to discount their services.

Leyba notes, “I never discount the commission because I market that property and make it as desirable as possible for buyers. I put a lot of effort and time into the marketing that I put together, and I think that’s where my value lies.”

Agents often don’t lower their rate because it may reduce their ability to negotiate a higher sale price for the seller. An agent’s services often include photography and pricing analysis, so a lower commission could also translate into a smaller marketing budget for your property, an inaccurate list price, fewer home promotions, and a lower likelihood of selling.

Exceptions can occur if you’ve already found a buyer. Let’s say you’re selling your hacienda to a friend or have decided to sell to a family member. In that case, the agent would likely be willing to play the role of transaction coordinator and independent go-between for a reduced commission rate.

Leyba explains, “We [real estate agents] represent both parties as a transaction broker and help to just broker the deal. It’s usually a benefit to the seller because they get a potential discount and they’re more involved in the transaction. They have a direct line to the contract, which is something that is a benefit.”

Overall, commissions in New Mexico are negotiable, but research first. When asking an agent to lower their pay, you limit the pool of agents willing to work with you. And the downsides to working with a low-commission agent can be steep. Without a top New Mexico agent in your corner, you could dramatically undersell your home, have a rough selling experience, or fail to sell the home.

What is included in a real estate agent’s commission?

A full-service real estate agent in New Mexico will provide a high level of offerings that give you a great selling experience and boost exposure to your home.

An agent’s services fall into a few main categories:

Guidance on pre-sale improvements

Agents see a lot of houses in their New Mexico markets. They will have an eye for the small but impactful improvements you could make to help it sell for more. The best agents will go above and beyond to help their clients get the job done.

Pricing strategy

An agent will put together a comparative market analysis (CMA) in the form of a thick packet featuring charts, facts, figures, and photographs of houses. The analysis will show you what your home is worth based on comparable sales in the neighborhood, market trends, and local price per square foot. This key tool helps you set a realistic price to attract offers immediately in a fraction of the time it would take a non-professional to determine.

Leyba says, “Correctly pricing your home in today’s current market with the interest rates that have changed is key. Strategically pricing your house and marketing ensures you see action on the house.”

Marketing services

As part of their commission, at a minimum, New Mexico agents should offer expert home prep and staging, professional photography, marketing flyers and pamphlets, direct mail, automatic postings of your listing on major home search sites, local advertisements, exclusive previews for other brokers, and open house coordination. Advanced agents may also offer the development of a virtual tour.

Leyba explains, “A lack of marketing can result in no one finding your home. It will cause a drop the in the price. In years prior, the demand was so high, but that’s changed, and multiple offer situations have decreased. So, strategically pricing and marketing your house with someone that is a specialist within the neighborhood is invaluable.”

Offer management and negotiations

When you receive one or multiple offers, an agent will help you determine the strength of the offer and work with you to respond to buyers. They’ll advise on whether to accept, reject, or make a counteroffer while compiling offer spreadsheets to identify the best offer in bidding war situations.

If a buyer requests repairs after the inspection, an agent will help you push back where appropriate and advise when to concede. Should the appraised value be lower than the contract price, an agent can help you determine whether to ask the buyer to make up the difference or if you should lower your price.

Market knowledge and neighborhood expertise

Great New Mexico real estate agents know what local buyers seek in homes and which of your home’s attributes to highlight. An agent will skillfully incorporate key features into your home’s listing description and immediately be able to recognize what makes your house or the surrounding area special.

Leyba notes, “Having someone that knows the neighborhood, what sold, what didn’t sell, and how long thing stayed on the market helps you with a home sale. You want to attend to those issues for clients. With market knowledge, we won’t price too high, and we get to avoid a house sitting longer on the market. In that way, we save the seller from losing money because of an inaccurately priced home.”

What is a fair real estate commission in New Mexico

As noted above, the average commission rate in most New Mexico markets is around 6% to hire a full-service real estate agent. This rate should mean you have an agent dedicated to selling your home for the best possible price, who is available and communicative, and who is willing to shepherd the transaction from start to finish. If an agent isn’t willing to offer all or the majority of services listed above, you should interview more candidates.

What if my New Mexico house doesn’t sell?

Real estate agents only get paid commissions if and when your home sells successfully. Most real estate contracts include an exclusive right to sell, which gives the real estate agent the sole right to market the property, list the property on MLS, and receive the commission if the sale closes in a determined time frame. If your house remains on the market beyond the period outlined in the listing agreement, you are not obligated to pay your agent.

However, keep in mind that your listing agreement may contain a protection clause, also known as a “brokerage protection clause,” “safety clause,” “extension clause,” or “tail provision.” The protection clause states that if a buyer who the listing agent introduced to the property purchases the property after the listing agreement expires, the seller still must pay the agent a commission.

Leyba says, “If you hired a real estate agent to sell your house, you’ll sign a listing agreement. [The agents] make an investment in the house and market the house adequately. Usually, those run for six months. Let’s say after the house has been listed for six months, and it hasn’t sold. You would have the option to sign a new listing agreement or part ways and move on.”

How can you avoid paying Realtor fees?

There are two main ways to avoid paying Realtor® fees. You can sell your New Mexico home without an agent’s help or sell it directly to a cash buyer without ever going on the market.

For Sale By Owner

Without a real estate agent, you’re responsible for preparing your home for sale, marketing, negotiating, and navigating legal and financial documents. When selling a house on your own, you’ll need to hire an attorney, at a minimum, to ensure the paperwork is right.

Typically, For Sale By Owner (FSBO) makes the most sense if you already have a buyer. As of 2022, 50% of FSBO sellers knew their buyers.

This indicates that while the FSBO route is rare, making up just 10% of sellers, it’s even rarer to forgo a real estate agent’s help when you don’t already have a buyer lined up and ready to go. In addition, according to a 2022 National Association of Realtors report, the median FSBO house sold for $225,000, compared to a median of $345,000 for agent-assisted sales. That’s a significant loss of proceeds to save 6% on commissions.

Leyba explains, “This is the biggest transaction in your life, right? You want adequate representation to ensure that you’re doing everything above the board, that you’re doing everything legally, and that you have done all of your title per paperwork. You’ll want to know that you’ve handled all the pieces on your inspection or your purchase agreement. When you hire a broker to do that deal for you, you’re hiring someone that’s an expert, and it decreases your liability.”

The decision to go solo can also impact your proceeds and peace of mind, Leyba adds.

“Handling the transaction on your own, you leave money on the table. Because maybe you mismarket the property, or you incorrectly negotiate. Maybe you forgot to disclose things that you should’ve disclosed, and now you’re in a legal dispute There are a lot of factors that are pitfalls when you do a for sale by owner transaction,” he cautions.

Sell to a cash buyer

Cash buyers — including iBuyers, investors, and house-buying companies — are individuals or entities that purchase your home outright without the need for lender financing. These buyers typically make off-market purchases and can provide speed and convenience to sellers.

Just be aware that the price offered by most cash buyers may not match what you could receive on the open market with the help of a top agent.

If you’re interested in a cash sale, you can receive a no-obligation offer through HomeLight’s Simple Sale platform with no hidden fees or agent commission. Simple Sale connects you to the largest network of cash buyers in the U.S.

Leyba notes that while you will likely receive less money, selling for cash can be a solution for some sellers, “A cash buyer gives you a quick transaction… If you’re in a position where you’re okay allowing someone else to generate revenue on it because you’re happy with the price, there’s no harm to you. That’s fine. You get to close out quickly and leave the home behind.”

Now you know how New Mexico agent commissions work

Sellers pay real estate commissions in exchange for an agent’s expertise and services throughout the sale process. If you’re worried about the cost of the commission, consider that targeted upgrades, stellar marketing, and savvy negotiations can help you maximize your sale price. With a performance-proven New Mexico agent to guide you, you also avoid the stress of navigating this complex process without professional oversight.

The key is finding a quality agent who provides the highest value for their commission fee. Our transaction data shows that the top 5% of agents in New Mexico sell homes for as much as 10% more than the average agent.

HomeLight can connect you with top New Mexico agents with an experience tailored to your needs. Whenever you’re ready to get started, HomeLight would be happy to put your commission worries to rest by introducing you to several agents in your area who are well worth it.

Writer McCoy Worthington contributed to this story.

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