Understanding Recent Changes in VA Loan Rules and Realtor Fees
If you’re a veteran or active-duty service member looking to buy a home with a VA loan, there are some recent changes you should know about. These changes can affect how you work with real estate agents and what costs you might have to cover.
What’s New?
Temporary Fix for Realtor Fees: The Department of Veterans Affairs (VA) has introduced a temporary rule that allows veterans to pay their real estate agent’s fees, known as buyer-broker fees. This change, effective August 2024, aims to help veterans stay competitive in the housing market. Before this, VA rules prohibited veterans from paying these fees, which could put them at a disadvantage in a competitive market where non-VA buyers could offer to cover these costs (HousingWire) (RISMedia).
Why the Change? The change is part of a response to a settlement involving the National Association of Realtors (NAR). This settlement alters how real estate commissions are handled, pushing for more transparency and negotiation between buyers and agents. The new rule ensures veterans can now pay these fees themselves, making their offers more attractive to sellers (Veterans United Home Loans) (Community Home Lenders of America (CHLA)).
What Does This Mean for You?
- Increased Costs: Veterans may now need to budget for these additional costs. For instance, if you’re buying a $300,000 home, a 3% agent commission could mean an extra $9,000 out of pocket. This could be challenging, especially for those without substantial savings (Veterans United Home Loans).
- More Competitive Offers: On the positive side, being able to pay your agent’s fee might make your offer more competitive. Sellers often prefer offers where they don’t have to cover the buyer’s agent fees, which can make a VA buyer’s offer more appealing (HousingWire).
- Negotiation Flexibility: Veterans still have the option to negotiate with sellers to cover these fees. The VA’s rule states that these fees must be “reasonable and customary,” so there might be some room to discuss how much you will actually pay (RISMedia).
Tips for Veterans
- Budget Carefully: Make sure you factor in these potential costs when planning your home purchase. Speak with your lender and real estate agent to understand all possible expenses.
- Negotiate: Don’t be afraid to negotiate with the seller. While you can now pay the fees, it’s still possible to ask the seller to cover them as part of the deal.
- Stay Informed: The VA plans to review and possibly update these rules, so keep an eye on any new changes that might come up in the future. Staying informed will help you make the best financial decisions (HousingWire) (RISMedia).
Choosing the Right Lender
When navigating these changes, it’s important to have a trusted VA lender by your side. Ross Mortgage Corporation, with over 75 years of experience, is a reliable partner in helping veterans and active-duty service members secure the best home loans. As a trusted VA lender, Ross Mortgage Corporation is committed to guiding you through these new rules and ensuring you get the most out of your VA loan benefits.
Understanding these changes can help you navigate the home-buying process more effectively. By being prepared and informed, you can make the most of your VA loan benefits and find the home that’s right for you.
