VA loans

VA Loan Rules For Real Estate Agent and Broker Fees

December 13, 2012

VA Loan Rules For Real Estate Agent and Broker Fees

Some house hunters are happy to do the looking. They go neighborhood to neighborhood looking for “for sale” signs in the area they want to live, and make inquiries. Others do their searching online or with the help of local real estate guides.

Still others get the help of a real estate agent, or come into contact with an agent as part of an open house, and decide to make an offer with that agent.

But does a VA borrower have to pay an estate agent fee or a broker fee in connection with a home purchased with a VA mortgage?

According to VA Pamphlet 26-7, Chapter Eight, Section Three, “Fees or commissions charged by a real estate agent or broker in connection with a VA loan may not be charged to or paid by the veteran-purchaser.”

That should not be confused with the notion that the VA discourages or forbids a VA borrower from using such services, but the VA rulebook is clear.

“While use of “buyer” brokers is not precluded, veteran-purchasers may not, under any circumstances, be charged a brokerage fee or commission in connection with the services of such individuals. Since information on property available for purchase and financing options is widely available to the public from a variety of sources, VA does not believe that preventing the veteran from paying buyer-broker fees will harm the veteran.”

Borrowers and agents will find a similar rule–applied in a different manner–which applies to attorney fees. Borrowers cannot be charged by the lender for its own attorney fees. That expense is the financial institution’s responsibility. Borrowers should note the wording of this rule in VA Pamphlet 26-7, which includes the following:

“VA does not intend to prevent the veteran from seeking independent legal representation. Therefore, the veteran can independently retain an attorney and pay a fee for legal services in connection with the purchase of a home. Closing documents should clearly indicate that the attorney’s fee is not being charged by the lender, but is being paid by the veteran as part of an independent arrangement with an attorney. ”

Do you have questions about VA home loans? Ask us in the comments section.


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