In March, the National Association of REALTORS® (NAR) reached a settlement in a class-action lawsuit, prompting changes to its brokerage fee rules that could potentially alter the real estate market. Ahead of this settlement’s implementation, the VA has announced a crucial update to ensure Veterans using VA-guaranteed home loans remain competitive in the market. Starting August 10, 2024, eligible Veterans, active duty service members, and surviving spouses can use their VA home loan benefits to cover certain real estate buyer-broker fees. This move aims to maintain Veterans’ access to homeownership through the VA program.
What is the impact of this settlement?
The full impact of the settlement is still unfolding as the real estate market adjusts. However, it’s possible that homebuyers may increasingly be expected to cover their own buyer-broker fees. Traditionally, in VA’s program, sellers often paid these fees on behalf of Veterans.
Why does this potential change matter for Veterans using the VA-guaranteed home loan benefit?
Historically, Veterans were not allowed to pay buyer-broker fees when purchasing a home with a VA home loan. With the market evolving due to the settlement, Veterans might face challenges in remaining competitive. This update ensures that Veterans can continue to be strong contenders in the homebuying market.
What does this mean for you?
Beginning August 10, 2024, Veterans utilizing VA home loan benefits can negotiate and potentially pay for their real estate professional’s commission (the buyer-broker fee), under certain conditions. VA advises Veterans to work with mortgage lenders and real estate professionals experienced with VA home loans to navigate these negotiations effectively.
Should you negotiate these fees?
VA recommends that Veterans negotiate buyer-broker fees with their real estate agents. Veterans can also request that sellers cover these fees at closing. Additionally, any fees charged must be reasonable and customary within the local market.
Will there be future updates?
The real estate market is still adjusting to the settlement, and the full effects are yet to be seen. The VA’s temporary measures aim to protect Veterans from any negative impacts of the settlement. The VA will continue to monitor changes in the brokerage market and realtor commission models, working to reduce costs, enhance competition, and expand homeownership opportunities. The VA remains committed to ensuring Veterans are not disadvantaged in the homebuying process.
For more details on this update, please visit Circulars: Calendar Years 2021 to Present – VA Home Loans.
