(Photo: RDNE Stock project)
In response to a recent class-action lawsuit settlement involving the National Association of REALTORS®, NAR, the VA has made updates to the VA home loan benefits. This lawsuit settlement, reached in March, mandates changes to brokerage fee rules that could significantly alter the real estate market, particularly affecting who pays the buyer-broker fees.
To help Veterans remain competitive in this evolving market, the VA has announced that eligible Veterans, Service Members, and surviving spouses can now pay certain real estate buyer-broker fees when purchasing a home using their VA home loan benefits. Previously, Veterans were not allowed to pay these fees themselves. Instead, it was common for sellers to cover these costs. However, with the settlement’s impact, there’s an expectation that homebuyers might increasingly need to shoulder these fees.
The settlement’s full ramifications are still unfolding, but the VA’s proactive change is intended to ensure that Veterans are not put at a disadvantage. This move is intended to keep the path to homeownership accessible for those using VA home loan benefits.
For Veterans, this change means they now have the flexibility to negotiate and potentially pay for their real estate professional’s commission, known as the buyer-broker fee. The VA advises Veterans to work with mortgage lenders and real estate professionals who are experienced with the VA home loan program. These professionals will understand the specifics of the recent settlement and how it affects home purchase contracts.
The VA encourages Veterans to negotiate these fees with their real estate professionals. Veterans can still request that sellers cover the buyer-broker fees at closing, but having the option to pay these fees themselves adds an important tool in their homebuying arsenal. Additionally, all buyer-broker fees charged to Veterans must be reasonable and customary within local markets, providing an extra layer of protection.
Looking ahead, the VA will closely monitor the settlement’s impact on the real estate market and adapt as needed. The temporary measures introduced are designed to ensure Veterans are not disadvantaged as the market adjusts. In an effort to reduce expenses, boost competition, and expand the number of avenues for Veterans to become homeowners, the VA is dedicated to investigating new realtor commission models that may arise from this settlement.
The VA says they want to ensure that Veterans are not negatively affected during this transitional period in the real estate market; therefore, it will continue to take necessary steps, including potential rulemaking, to protect and support Veterans in their homebuying journey.
For more information on this update, Veterans are encouraged to visit the VA Home Loans Circulars from calendar years 2021 to the present.
Author: Rikki Almanza
Rikki is a Web Content Coordinator for the American Legion, Department of California. With a deep-rooted connection to the military, a spouse who is a Navy veteran, a father who served in the Air Force for 25 years, and a grandfather who proudly served, Rikki is committed to using her skills and knowledge to provide valuable assistance and resources to servicemembers and veterans.
