It’s been about five months since the VA announced this temporary solution. It remains to be seen how long this policy will remain in place or whether the VA is considering other alternatives.
A VA spokesperson said in an emailed statement that the agency is “actively monitoring” the impact of the settlement.
“Although there is temporary guidance allowing veterans to pay certain real estate purchase brokerage fees, the Department of Veterans Affairs is considering making these changes permanent through the rulemaking process,” a spokesperson said. wrote: “This approach will allow veterans to remain competitive in the home buying market without being disadvantaged by the settlement. The schedule for permanent changes will be the result of an ongoing evaluation and stakeholder feedback. It depends.”
Amanda Tucker, Chief Risk and Compliance Officer atlantic bay mortgageMany industry insiders said they felt a little uneasy about the uncertainty of the situation.
“We continue to receive questions from real estate agents and veterans about what ‘temporary’ means and how long it will last,” Tucker said. “If this is temporary and rolled back at some point, I don’t think there’s any indication that that’s going to happen, but what will the impact be? We’re all wondering what this is like. We’re in this environment where we know a lot about what’s going on, but what happens if that changes?”
Although the future remains uncertain, the current situation for VA buyers is in many ways better than it was before the fee litigation and NAR settlement, she said.
“We have actually seen transactions for Veterans Affairs products and programs go really smoothly given the guidance that the Department of Veterans Affairs has issued,” Tucker said. “These are not financing transactions that still see confusion. As a lender, when working with a real estate agent, having the opportunity to point out that clear guidance regarding the documents required for the transaction is extremely helpful. .”
In addition to sorting out issues that NAR’s settlement provisions may have created for VA buyers, Mr. Tucker also said that VA’s interim guidance will help states where buyer agency agreements were required prior to NAR’s business practices. He said the situation for VA buyers has also improved. It changes.
“In the past, veterans would sign a buyer brokerage agreement because their state required it, but by the time they came to us as a lender, the veteran was already a buyer broker. “So we ended up in a situation where we had to work to invalidate the document or the veteran would automatically be barred from using VA products.” ”Tucker said.
“So this mentorship really levels the playing field for veterans, giving them the opportunity to work with professionals and supplementing on their own if they wish.”Additionally, sellers If you are not willing to pay a portion of the buyer agent’s fees, this does not preclude you from considering the home. ”
Tucker also believes that the debate surrounding VA loans earlier this year increased awareness of the loan product. This reduced confusion and lack of understanding about the product.
“I think we’ve really seen real estate agents digging deeper into VA products and programs,” Tucker said.
Todd Armstrong, Army veteran based in San Diego compass agent leading a securities company military departmentshares similar views.
“I totally get it now,” Armstrong said. “Part of the reason is that there is a limited number of buyers at this time, and sellers and their agents have an obligation to educate themselves about the VA process, as they must consider every offer they receive.”
Armstrong said the San Diego market has cooled considerably since the height of the pandemic-induced home buying frenzy.
“The market is moving into a buyer’s market, or very close to it, but it’s definitely more balanced than it was before,” Armstrong said.
For this reason, Armstrong says, most sellers either openly offer to cover the buyer’s broker’s compensation, are willing to accept an offer that requires the buyer’s broker’s compensation, or are willing to accept a net amount of the desired sale proceeds. He said he would comply as long as he could.
While the immediate situation is good, allowing VA buyers to take advantage of the no-down payment benefits of VA loans, Armstrong is concerned about what will happen in the future when the market heats up again. There is.
“It’s already difficult enough competing with cash and traditional mortgages to get our offer accepted, so we’re negotiating to have our fees covered and other “I think it’s even more difficult when people don’t have that.” “So even if it’s only a 2% request, in my opinion it’s very likely to force them out of competition with other offers.”
Agents report that whether sellers offer, or consider offering, buyer broker compensation is currently dependent on market strength, so it may be difficult to see how VA buyers fare under tougher market conditions. Only time will tell how we will respond.
