In March, the National Association of REALTORS® (NAR), a leading advocate for homeownership and real estate issues, settled a class-action lawsuit, necessitating changes to its brokerage fee rules. This settlement, which could bring about significant shifts in the real estate market, has prompted the VA to announce an important update to support Veterans using the VA-guaranteed home loan benefit.
Starting August 10, 2024, eligible Veterans, active-duty service members, and surviving spouses can now pay for certain real estate buyer-broker fees when purchasing a home. This means that Veterans can negotiate and pay for their real estate professional's commission (the buyer-broker fee), subject to specific safeguards. This initiative aims to ensure that VA's programs continue to promote access to homeownership for Veterans by keeping them competitive in the market.
What Does This Settlement Mean for Veterans?
The full impact of the settlement is still uncertain as the real estate market adjusts. However, there might be an increased expectation that home buyers will cover their own buyer-broker fees. Traditionally, in the VA's program, sellers have paid for the Veteran's buyer-broker fees.
Importance of This Change for Veterans Using VA Home Loan Benefits
Previously, Veterans couldn't pay buyer-broker fees when purchasing a home with a VA home loan. With the new settlement, Veterans could find themselves at a disadvantage in the evolving homebuying market, as they may now be responsible for these fees. However, this change also presents an opportunity for Veterans to negotiate these fees and potentially secure a better deal. To counter any potential disadvantages, the VA has updated its policy to ensure Veterans remain competitive buyers.
What This Means for You
From August 10, 2024, Veterans using VA home loan benefits can negotiate and pay for their real estate professional's commission (the buyer-broker fee), subject to specific safeguards. The VA encourages Veterans to seek out mortgage lending and real estate professionals experienced with the VA home loan program to ensure they understand compensation negotiations and the settlement's impact on home purchase contracts.
Should You Negotiate These Fees?
Veterans are strongly encouraged to take control of their homebuying process by negotiating buyer-broker fees with their real estate professional and asking sellers to cover these fees at closing. Additionally, all buyer-broker fees charged to Veterans using the home loan benefit must be reasonable and customary within local markets.
Future Updates
The complete impact of the settlement on the real estate market is yet to be determined. However, the VA's temporary measures announced will help ensure Veterans are not adversely affected by the class-action settlement. The VA is diligently monitoring the settlement's effects on the brokerage market and emerging realtor commission models. The VA is committed to lowering costs, boosting competition, and increasing pathways to homeownership. Future rulemaking will be pursued to protect Veterans from disadvantages in the homebuying process.
Rest assured, the VA is unwavering in its commitment to ensuring that Veterans are well-supported and competitive in their pursuit of homeownership. Stay tuned for further updates, and confidently leverage your VA home loan benefits as you know you can count on The Sharpe Mortgage Team to inform you of all important mortgage news.
