The National Association of Realtors’ $418 million settlement earlier this year is expected to change the real estate industry permanently.
The future of one sector of buyers, however, appears to be unknown.
Veterans using VA loans have traditionally had a unique buying experience because of previous limitations with commission payments. Now that sellers have the option to cover the buyer’s commission, the VA has adjusted the rule so that veterans can pay for their agent’s commission, subject to certain safeguards.
“I believe this change is positive because it gives veterans that freedom to pay the commission when necessary,” explained Gabriella Lisi, a realtor associate at RE/MAX Revolution. “However, you still cannot apply the commission as a concession and the fee cannot be financed.”
Multiple agents said the common belief is getting offers from a veteran accepted can be a bit trickier because of stricter guidelines. However, Lisi said there is always a workaround so all parties involved leave satisfied.
“There are ways to make your offer more attractive. You can limit inspections, offer a flexible closing date, and just try to cater to the seller as much as possible.”
“Many sellers believe there are more roadblocks with VA loans but that is not true,” added Bill Maier, sales manager at United Mortgage. “In reality, everyone has to jump through the same hoops as everyone else.”
Wade Dew, real estate agent for RE/MAX Revolution, said he has confidence that sellers will continue to cover the commission for buyer’s agents, including with veterans.
“I’ve had plenty of VA buyers and I don’t think they should be worried. I would predict that a majority of the homes for sale will offer the buyer’s agent commission because it is only in their best interest to do so. I don’t think there is going to be this big shift like people have been predicting,” Dew said.
The Mortgage Note asked multiple agents: What would your perfect set of rules be for veteran buyers?
“In a perfect world, rules would be passed so that the buyer does not have to eliminate choices,” said Dew. “So for example, allowing them to be able to finance commissions into the loan or make it a concession so it is more feasible when the seller is not willing to pay it.”
“I think it should be the same as Freddie Mac which allows them to finance a commission if they have to or allow it as part of a concession if it falls within the allotted percentage,” explained Lisi. “For example, if you can have up to $15,000 as a concession, you would be allowed to use the credit as you see fit. So maybe $10K can go towards closing costs and $5K would go towards your buyer’s agent. But with VA, you can’t do this yet.”
While a lot of kinks are still being worked out regarding the settlement, Dew encourages all veterans to not worry because he has confidence that all the details will be figured out so that veteran buyers can get the home they deserve.
“I don’t feel like veterans need to be in fear because there is always a solution. For any home, you can always work to negotiate and address compensation first.”
The settlement is still subject to final court approval. A hearing has been set for Nov. 26.
