How is the commission typically calculated for a real estate transaction in New Mexico?

In New Mexico, real estate commission is typically calculated as a percentage of the sale price. This method aligns with industry standards nationwide, where agents earn a commission for their services based on the total value of the property sold. The percentage can vary depending on the agreement between the seller and the real estate broker but is commonly around 5% to 6% of the sale price, which is then usually split between the seller’s and buyer’s agents.

This percentage-based structure incentivizes agents to work effectively towards obtaining a higher sale price since their earnings directly correlate with the final sale amount. Additionally, this system allows for more predictable and manageable costs for clients, as they can estimate what the commission will be based on the listing price of their property.

Other options like a flat fee, hourly wage, or calculations based on property size don't reflect the common structures utilized in the real estate market, which focuses on a percentage of the sale price for both fairness and motivation tied to the financial outcome of the transaction.