The U.S. Department of Veterans Affairs (VA) issued a circular announcing a temporary policy change that will enable borrowers using the VA home loan program to pay certain real estate buyer-broker fees when purchasing a home.
The circular comes in the wake of the class-action settlement involving the National Association of Realtors (NAR) and several major brokerages which resulted upcoming changes to the real estate broker commission structure. Prior to this policy shift, the VA home loan program prevented buyer-broker fee compensation/
The VA stressed the policy change was temporary, adding the department will monitor the effects of the settlement on the brokerage market before pursuing rulemaking on the matter.
“We always want to put Veterans and their families in the best possible position to buy the homes they want, and that’s what this update is all about,” said Under Secretary for Benefits Joshua Jacobs. “Veterans using VA home loan benefits can now pay reasonable and customary amounts for certain charges — including commissions and other broker-related fees — thus ensuring that they remain competitive in the rapidly changing housing market.”
NAR President Kevin Sears issued a statement praising the temporary policy change.
“The VA’s home loan guaranty is the only program that explicitly bans buyers from directly paying for professional real estate representation,” said Sears. “We applaud the VA for revising this policy and allowing veterans and active-duty service members the same advantages as other buyers in a competitive real estate market.”
Sears added that NAR will “support the VA in whatever way possible to protect the brave men and women who serve this country and ensure they are given the equal opportunity to achieve the American Dream of homeownership.”
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You can still write in the amount of buyer broker costs be paid by seller right as long as you stay within seller concession guidelines right?
Yes, seller concessions can be used for buyer broker compensation. Next step is for NAR to get clarification from the VA that such concessions do not count towards the IPC limit.
Now work on VA to allow home loans without requiring a termite, section 1 clearance, prior to closing. Let buyers handle the quality of their homes in their own feasible timing. Offers with VA loans are often not accepted by sellers in multiple offer situations due to the termite clearance requirement imposed by the VA. Sellers don’t want to be responsible for the cost, facilitating repairs, or fumigation hassle while they are trying to move out, nor do buyers want to spend money on a home they don’t own yet without security. It’s a shame for veterans to be at a disadvantage by using their VA loan option. It would beneficial for veterans to not have to deal with this requirement, so they can be competitive with a typical conventional loan buyer.
I cannot believe what I am reading. What professional REALTOR would not suggest to his/her client to get a termite clearance letter? Real Estate is not about an agent making a commission it is about looking out for the best interest of the client even if it is not in the agent’s best interest. Would you purchase a home without a termite clearance letter? The market has slowed down and now buyers are not in rush to purchase before the other person get it. Let us look out for our clients best interest even if it means that they do not get that house that everyone else is trying to get.
AGREE! Thank you for that Silas! I was thinking the same! Not only should that comment not be on this thread as we are talking about a separate issue….but the comment shocked me! Keep the termite letter in place!
VA offers are rarely accepted because listing agents tell their sellers there is no skin into the game and thus if appraisal doesnt come at value, buyer will not be able to complete purchase wasting vauable time. VA offers are only accepted when no other offers are submitted.
For the record, a VA buyer IS allowed to pay offer the appraised value for a property. They can’t be forced to do it (VA escape clause) BUT they are allowed to do it and it happens in this sellers market all the time. It is a brutal sellers market out there, stop blaming the Realtor for this.
Thanks goodness the policy has been changed for realtor – so they can get paid for their services.
I believe the termite letter needs to stay in place as a requirement.
I agree with you about the termite letter.
Huge win for VA buyers thanks to NAR!
Agree with Chey, a huge win for VA buyers!!!
The only thing the seller has to pay in regards to termite is the report.. so like a hundred bucks. If there are repairs, the va borrower can pay them.
Great news for US Military