VA Loans and Realtor Commission: Does The Borrower Pay?
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.
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