real estate

VA Loans and Realtor Commission: Does The Borrower Pay?

September 27, 2018

VA Loans and Realtor Commission: Does The Borrower Pay?

078-logoA reader asks, “Can seller concessions cover a part of realtor’s commission if it states buyer to pay it in contract?”

VA loan rules address this issue in a specific way, but not the way the reader who contacted us with this question might expect. VA borrowers cannot be required to pay realtor commission according to a document published by the Cleveland VA Regional Loan Center.

The document titled Closing Cost Information For Lenders (linked here to a downloadable .PDF file) gives specific VA policy with regard to the realtor’s commission.

At the very end of the document, it says:

Finally, there are some fees that can never be paid by the veteran regardless of whether
the 1% origination fee was paid or not. Those are:
• Termite/Pest Inspection
• Attorney Fee Charged as a Benefit to the Lender
• Mortgage Broker Fee
• Realtor Commission

• Prepayment penalties
• HUD/FHA Inspection Fees for Builders”

We are not experts in contract law, but it seems possible that any sales contract that requires the borrower to pay the realtor commission or fee would need to be altered to exclude that clause in order for the VA loan to be approved based on the information provided above.

Do you have questions about VA home loans? Ask us in the comments section. All comments are held for moderation, it may take time for your to appear.

2 Comments
  1. Roger P. Lemke

    I am looking for a guestamint of the closing $$$ so I am not blind-sided with a cost $$$ that I didn't figure for closing cost. We are in the last part of the application, just waiting for the VA's Appraisal report. Then all the paperwork goes to the underwriter for his/her approval. The target date is Dec. 1st to close on the house.

    • Joe Wallace

      You would need to work with the lender to get a Good Faith Estimate for these charges--they are not standardized and vary greatly depending on the housing market, the nature of your transaction, whether you are making a down payment and other factors.

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