Temporary Local Variance for Buyer-Broker Charges Announced

VA is authorizing a temporary local variance that will allow Veterans to pay reasonable and customary amounts for any buyer broker charges – including commissions and any other broker-related fees. Subject to the following:

  • The home the Veteran is purchasing is an area where—
    • listing brokers are prohibited from setting buyer-broker compensation through
      multiple listing postings; or
    • buyer-broker compensation cannot be established by or flow through the listing
      broker.
  • Buyer-broker charges are not included in the loan amount.
  • Buyer-broker charges paid or to be paid by the Veteran are to be considered in
    determining whether the Veteran has sufficient liquid assets to close the loan.
  • An invoice is not necessary to support the buyer-broker charge; however—
    • The total amount paid, if any, by the Veteran is to be recorded in lines 1 through 3 of
      section H (“Other”) on the Closing Disclosure, and
    • VA considers the buyer-broker representation agreement to be part of the sales contract package.

As such, VA expects lenders to upload the agreement as part of the package lenders use when requesting an appraisal. VA also expects lenders to retain the agreement in the loan. This circular is effective on August 10, 2024 until further notice.

Important Information Related to Brokerage Charges:

  • VA encourages Veterans to negotiate the amount to be paid to their buyer-broker, whether
    the Veteran or seller pays the amount.
  • The temporary variance announced by this Circular does not prevent the seller of the
    home from paying for the Veteran’s buyer-broker charges.
  • As a reminder, VA does not treat the seller’s payment of buyer-broker charges as a seller
    concession.

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