BAM Key Details:

  • The Department of Veterans Affairs (VA) has announced a temporary policy allowing veteran and active-duty homebuyers to directly compensate their buyer agent. 
  • NAR president Kevin Sears responded to the announcement with an email applauding the VA for the policy change, which comes a few months before the proposed NAR settlement is scheduled to go into effect on August 17, 2024.

Before the NAR settlement goes into effect as early as August 17, 2024, the Department of Veterans Affairs (VA) has announced a temporary policy allowing homebuyers who are veterans and active-duty service members to compensate their buyer agent directly. 

The temporary policy will allow veteran homebuyers to compete for available homes, especially in situations where the seller is not offering buyer agent compensation. 

Temporary Circular Allows for Buyer Agent Compensations for Veterans

In a circular dated June 11, 2024, the VA outlines the “Temporary Local Variance for Buyer-Broker Charges,” allowing veterans to pay “reasonable and customary amounts” for buyer agent representation under certain conditions:

  1. The home is in an area where— 
    1. The listing agent is prohibited from sharing buyer agent compensation offers on the MLS, and
    2. Buyer agent compensation cannot be set by or flow through the listing agent
  2. Buyer agent commission/charges are not included in the loan amount
  3. Buyer agent charges covered (or to be covered) by the veteran buyer are taken into consideration to determine whether the buyer has sufficient liquid assets to close. 

For more details, refer to the circular

NAR Responds

The National Association of Realtors (NAR), meanwhile, responded to the news with a statement from President Kevin Sears reporting on the update and applauding the VA’s decision. 

From the president’s statement:

“The VA’s home loan guarantee is the only program that explicitly bans buyers from directly paying for professional real estate representation. We applaud the VA for revising this policy and allowing veterans and active-duty service members the same advantages as other buyers in a competitive real estate market.  

“NAR launched an all-hands advocacy effort on this issue, including working with Congress and the relevant VA Committees, meeting with the VA, collaborating with industry partners, and holding hundreds of meetings on Capitol Hill during the Realtors® Legislative Meetings in May.

“We look forward to continuing this conversation, and our 1.5 million members stand ready to support the VA in whatever way possible to protect the brave men and women who serve this country and ensure they are given the equal opportunity to achieve the American Dream of homeownership.”

The VA home loan guarantee program provides veterans and active-duty service members a “centralized, affordable, and accessible” method of buying homes as an earned benefit for their service to our country. 

Previously, veteran buyers using the home loan benefit were prohibited from directly compensating their buyer agent, putting that responsibility squarely on the seller or listing agent. 

This policy would put veteran buyers at a severe disadvantage when the seller is not willing to offer buyer agent compensation, leaving the buyer with three options:

  • Forego agent representation
  • Choose a different loan type (and forego the VA home loan benefit)
  • Leave the market entirely

Also, if the Department of Justice (DOJ) gets its way and sellers are prohibited from making offers of compensation to buyer brokers, veteran and active-duty buyers would be left out in the cold without this revision to VA policy. 

As indicated in its statement, NAR will continue to monitor the situation and provide updates as it develops. We’ll do the same as we learn more.