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It’s a great time to be a homeowner in New Mexico. According to data from CoreLogic, the average individual with a mortgage in the Land of Enchantment gained $37,000 of equity in the past year. Selling your home can turn that pile of cash into a mountain of greenbacks. The median home price was around $310,000 in July of 2022, per the New Mexico Association of Realtors, and in some places, homes have been going for much more. In Santa Fe, for example, that number was more than $558,000.
However, selling a home in New Mexico is by no means easy. Homes have been sitting on the market for longer than in past years, and data from Redfin shows that more sellers have been forced to drop their prices recently. So, if you’re trying to cash in on the market, you’ll need to have a solid strategy in place. Read on for everything you need to know about selling a house in New Mexico.
Are you ready to sell?
If you’re wondering whether you should sell now or wait, be aware that the housing market in New Mexico is already starting to cool off. The record-low mortgage rates that spurred a frenzy of buying activity are long gone, so you might not find yourself in the coveted situation of having multiple buyers compete for your home.
Determining whether you’re ready to sell isn’t about the broader market, though. It’s about your personal plan for what’s next. If you’re going to sell your house while buying another, what will you do if you find a buyer immediately but can’t find a new place? And if you’re planning to move to a new city, make sure you consider the total cost of living to get a sense of how much you’ll need to budget for transportation, utilities, food and other essentials.
Preparing to sell
Once you feel personally ready to put your home on the market, it’s time to take some steps to make sure it’s in tip-top shape to turn buyers’ heads.
Is it worth upgrading your home before you sell?
It’s tempting to invest more cash in your home before listing it with the assumption that a brand new kitchen or a renovated bathroom will make the property go for a mile-high sum of money. However, most renovation projects will not manage to recoup their costs. You’re likely better off considering some quick, inexpensive improvements that can boost your property value.
What should you repair before you sell?
Unless you’re selling your home as a fixer-upper, most buyers aren’t going to want to spend more money to address issues after they move in. Put yourself in the buyer’s shoes to identify any visible problems that would make you think twice about buying the home. As you think about what to fix and what not to fix, a professional real estate agent can help you understand what kind of problems can be immediate turn-offs versus those that aren’t a big deal to a prospective buyer. Another option is to get a pre-listing inspection, which can help you get out ahead of potential concession requests. By conducting your own inspection, you’ll have an idea of what the buyer’s inspection will uncover.
Should you pay to stage your home?
You can also opt to stage your home, which is kind of like hiring a stylist to get the space ready for the red carpet. The cost of home staging depends on whether you are looking for minor help, like decluttering and organizing, or if you need to rent furniture for multiple rooms that will be empty after you move out. Staging is by no means a necessity, though, especially if you have a clean and contemporary home. Ask a real estate agent for their professional opinion on whether staging could boost your home’s marketability.
When is the best time to sell a house in New Mexico?
The best time to sell any house is whenever it’s likely to sell the fastest. By choosing a window when it will spend a limited number of days on the market, you’ll give yourself the best shot of attracting buyer interest without having to drop the price. In 2022, homes in New Mexico sold the fastest between April and June, when the average number of days on market hovered around 35.
However, New Mexico is a big state, and statewide averages can be misleading depending on what market you’re in. Consider the month of July, when the average number of days across all of New Mexico sat at 44. In Albuquerque’s Bernalillo County, homes were selling in an average of just 10 days, but in Taos, sellers were waiting for what felt like a lifetime: 184 days.
Find a local New Mexico real estate agent
The wide gap in days on market across New Mexico is a good reminder of the importance of working with a knowledgeable local real estate agent. Real estate is a hyper-localized industry, and having an expert who knows your specific market will help you develop a successful strategy for promoting your listing. While you will need to cover commission fees — which typically run 3 percent of the sale price to your agent and another 3 percent to the buyer’s — it’s worth it. The most recent research from the National Association of Realtors shows that agent-assisted sales have historically commanded around $58,000 more than FSBO (For Sale By Owner) listings.
It’s not just about the money. Selling a home requires a ton of time and expertise, as well. Your agent will shoulder all the responsibilities of hiring a professional photographer, crafting your listing, scheduling and welcoming visitors and negotiating with buyers. You get to just sit back and review offers when they come in.
Price your home competitively
Those offers aren’t guaranteed, though. You’ll need to determine an appropriate asking price to spark buyer interest. There are some simple and fast ways to estimate what your house is worth, but getting a more accurate sense of what someone will pay for your property involves a thorough review of comps. Your agent will walk you through properties similar to yours in the area to compare what they sold for. As you think about pricing, it’s important to recognize the headwinds that buyers are facing now. Higher mortgage rates are having a cooling effect on prices.
Documents and disclosures in New Mexico
You’ll need to complete New Mexico’s seller disclosure form, called the Adverse Materials Facts Disclosure Statement, which outlines any issues that would impact the desirability of the home. Is there water damage? Is the garage door broken? Has the HVAC system failed? These are a few of the areas included in the nine-page document. Additionally, if the property is part of a homeowners association, be prepared to hand over documents about the association’s financial health and any governing bylaws that a new owner will need to follow.
Need to sell your home fast?
If you’re in a rush and need to sell quickly, there are a few options that can speed up the process.
- Sell to an iBuyer: If you’re selling in the Albuquerque area, look into Opendoor, one of the biggest names in iBuying. You can complete an easy online questionnaire and get an offer within a few minutes.
- Sell for cash: We Buy Ugly Houses, HomeVestors, HomeGo and more — there are loads of companies that buy houses for cash throughout New Mexico. The upside: There’s no need to wait for a buyer to secure financing. The downside: These real estate investment firms are looking to make a profit by flipping your property or turning it into a rental, so don’t expect to get as much money as you would from someone who actually wants to live in it.
- List as-is: If your home requires a lot of repairs, you might consider listing it as-is. The as-is label functions as a disclaimer to buyers that what they see is what they get: No matter what a home inspection uncovers, you’re not going to cover the cost of repairs. It eliminates the time-consuming haggling for concessions that can delay a closing.
It’s time to come to grips with the costs of selling a house. As the seller, the transaction’s Realtor commissions come out of your proceeds from the sale. Unless you’ve negotiated a lower rate, you’ll probably need to pay a total of 6 percent to the agents involved — that’s $18,000 on a $300,000 sale. You’ll also have to pay for the cost of moving. Here are some other fees that will eat into your profits.
Cost of selling a home in New Mexico
- Transfer taxes: Let’s start with some good news for your bottom line — unlike many states, there is no real estate transfer tax in New Mexico. It’s important to keep an eye on this, though. The state legislature debated a proposal that would impose a transfer tax on sales of more than $500,000 in early 2022. While it hasn’t passed, it’s good to be aware of the potential for this to impact a sale if you decide to wait to list your property.
- Title insurance: In New Mexico, sellers are usually responsible for covering a title insurance policy for the new owner. For reference, one reputable title company in the state charges $1,547 for a new title policy on a $300,000 sale.
- Unpaid property tax: Depending on the timing of your sale, you may need to pay a prorated share of your portion of any unpaid property taxes.
- Attorney fees: There is no law that requires a seller to hire a real estate attorney in New Mexico. However, it’s always smart to enlist a legal expert to represent your interests when you’re dealing with contracts and large amounts of cash.
- Concessions: If a buyer’s home inspection identifies areas of concern, they may request a credit to cover part of their closing costs. It’s up to you whether to agree, but this is a fairly common facet of selling a home.
Take the first step
If you’re ready to sell your home in New Mexico and find a new place to live, it’s time to find a real estate agent to guide your path. Realtors all have different levels of experience and areas of expertise, so set up a few interviews, and ask them plenty of questions to understand how they will approach your listing. You want someone you feel comfortable with, but who will also be able to get you the best deal possible.
If you have any unpaid property taxes, you’ll need to settle the bill with the local government prior to closing on the deal. Otherwise, though, the tax burden of selling a home in New Mexico is quite cheap due to the fact that the state does not currently charge a real estate transfer tax.
The best way to sell your house, in New Mexico or anywhere, is to hire an experienced local real estate agent. An agent will do all the prep work to list it, set a competitive asking price, coordinate showings and negotiate with buyers. Going it alone with a FSBO (For Sale By Owner) listing is potentially cheaper, but much harder. And finally, if you don’t want to deal with the traditional real estate market, you can compare companies that buy houses for cash. No matter how you decide to sell it, it’s wise to hire a real estate attorney to represent your interests.
Yes, sellers pay some form of closing costs in every state, although the total amount varies by state and depends on individual negotiations. In New Mexico, the seller typically covers the cost of a title insurance policy for the new owner. The biggest chunk of money you’ll need to pay will be the commission fees to the real estate agents involved in the transaction, which usually run 3 percent of the purchase price to your agent and another 3 percent to the buyer’s agent. Otherwise, closing costs here are quite reasonable compared with many other states because New Mexico does not charge a transfer tax.