Great news! The Department of Veterans Affairs has signaled a temporary suspension of the buyer agent payment ban. This is a huge relieve for veterans.
I have been carefully monitoring and following the proceedings of the Western District of Missouri court cases focussed on the National Association of REALTORS®’ litigation of claims brought on behalf of home sellers related to broker commissions.
I did not want to be a part of the social media frenzy and spread unnecessary fear and misconstrued information and have therefore not been posting updates on these cases until I was sure where all of this might be heading. But as we all know, this has been going on for 5 years and will probably still continue long into the future and none of us have a crystal ball.
I have researched, monitored and educated myself over the last few years on how to better serve my clients in the wake of all the changes that my industry is dealing with at the moment. Real Estate is an ever changing, flowing river that has changed and have been molded over and over in the past. Change is always good and provides opportunity for growth. Not one of us will share the exact same opinions and perspectives and we all get to choose how we respond to this.
I choose optimism and positivity. I choose to focus on my clients and easing their uncertainty and concerns. This is why none of this has been disruptive in the services I provide for my clients. I continue to strive to better my business, myself and my services and will continue to research, educate myself and provide up-to-date excellent service to my clients. And most of all...be the light and focus on the positive. And that is why I am speaking up about this today and bringing you a little positivity...
The Department of Veterans Affairs plans to temporarily lift its ban on buyers directly paying for professional real estate representation until the agency deems it necessary to engage in a formal rulemaking process, a VA official said Tuesday at a Mortgage Bankers Association conference in New York.
Although not an official announcement, the comments from VA Deputy Director of Policy Michelle Corridon were met with relief from the real estate industry, as the VA’s home loan guaranty is the only loan program with this explicit prohibition. Veteran buyers have limited options in situations where the listing broker makes no offer of compensation to the buyer broker, potentially leaving veterans without professional representation or forcing them to switch to less favorable loan products.
“NAR launched an all-hands advocacy effort on this issue, meeting with VA officials, engaging with lawmakers and rallying our industry partners to ensure this prohibition was lifted,” says Shannon McGahn, chief advocacy officer at the National Association of REALTORS®. “This is also a testament to the thousands of REALTORS® who came to Washington just a few weeks ago with a unified message.
Without this change, thousands of veteran buyers could be denied access to professional representation in their pursuit of the American Dream of homeownership. Taking this extra step ensures veterans have the same opportunity as others to compete in a tight housing market. We applaud the VA for recognizing this danger and acting swiftly to protect veterans.”
The VA’s current policy states that veteran buyers who are using their VA loan benefit “may not, under any circumstances, be charged a brokerage fee or commission in connection with the services” of a real estate professional. That policy may create complications for these buyers in light of the practice changes required under NAR’s proposed settlement agreement.
The practice changes prohibit listing brokers from making offers of compensation on the MLS. They also require MLS participants working with a buyer to enter into a written buyer agreement with their clients that outlines the amount of compensation the buyer representative will receive and how this amount will be determined.
NAR submitted a letter to the VA in late March, urging a policy change to ensure veterans maintain their access to the VA home loan program, which has been a significant tool in helping service members achieve homeownership.
“In situations where no offer of compensation is offered from a seller, VA buyers are immediately at a disadvantage, potentially forcing them to forego professional representation, lose a property in an already limited inventory, choose a different loan product or exit the market entirely,” the letter read. “The VA home loan guaranty program is a vital homeownership tool that provides veterans with a centralized, affordable, and accessible method of purchasing homes as a benefit they earned for their service to our nation. NAR wants to ensure that VA buyers remain active participants in the real estate market to achieve the American Dream of homeownership.”
Content by REALTOR® Magazine Staff
If you have any questions regarding the court cases, the future of real estate and what all this means for buyers, renters and sellers, contact me and let's have a chat about it. I have also included links at the bottom of this page to reputable resources to learn more.
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