Can VA buyers pay commission?
We all know that the VA loan is one of the best loans to help Veterans and their families purchase their dream homes. If you have been paying attention to the news this past year, you probably heard about the big NAR settlement . With this settlement, a lot was left up into the air in regards to a Veteran paying for real estate commissions. The big question: “Can A Veteran Pay Real Estate Commissions?” Yesterday, the Department of Veteran Affairs (VA) dropped VA Circular 26-24-14 to address this issue.
Temporary Rules for Veteran Homebuyers
On June 11, 2024, the VA released a “Temporary Guidance” on the topic of whether or not a Veteran can pay for real estate commissions. Here is my take Fun Take on these Buyer-Broker Charges:
What’s Up on this VA Circular and Real Estate Commissions
The Department of Veterans Affairs (VA) has some juicy news! There’s a temporary change in the rules about how Veterans can handle real estate broker fees when buying a home.
The Backstory on VA Buyers and Real Estate Commissions:
Usually, the VA has strict rules about what fees and charges can be slapped on Veterans using the VA home loan benefit. Normally, Veterans can’t pay real estate broker fees. But guess what? The Under Secretary for Benefits (USB) can give a thumbs-up for some exceptions when it makes sense locally. Now, with the housing market going bananas, the VA is saying, “Hey, let’s let Veterans pay certain buyer-broker fees for a bit.” This change aims to keep Veterans competitive in this wild real estate game. The VA is cooking up a long-term policy but, for now, here’s the deal.
Temporary Changes for Buyer-Broker Fees:
Veterans can now pay reasonable fees to their buyer-brokers (think commissions and other broker-related stuff) if: a. The home they’re buying is in an area where:
- Listing brokers can’t set buyer-broker fees via multiple listing postings; or
- Buyer-broker fees can’t be set or managed by the listing broker.
- These fees aren’t rolled into the loan amount.
- The Veteran’s ability to pay these fees will be considered when checking if they have enough cash to close the loan.
- No invoice needed, but:
3. The total paid by the Veteran should be recorded in the “Other” section of the Closing Disclosure.
4. The buyer-broker agreement should be included with the sales contract when requesting an appraisal and kept in the loan file.
Key Points About VA Buyers and Brokerage Charges:
a. Veterans, haggle your broker’s fee whether you’re paying or the seller is.
b. Sellers can still cover these fees for Veterans.
c. If the seller pays these fees, it’s not considered a seller concession by the VA.
Got Questions?
Give us a Call if you need a little more clarity on this topic.
When’s This Happening?
This new rule kicks in on August 10, 2024.
How Long Does This Last?
This VA Circular is good until the VA decides to cancel it.
There you have it, folks! A temporary tweak to help our Veterans stay in the game in this crazy housing market. Now go out there and find that dream home!
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Joseph Small and Team at Patriot Pacific Financial Corp – Arizona’s VA Home Loan Experts! – have 20+ years of experience of helping eligible veterans and active-duty service members use their VA home loan benefit. Joseph is also a certified Veteran Mortgage Advisor. Give us a call to get started. #whoyouworkwithmatters
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