[Author’s Note: Although I am a licensed real estate agent, the opinions listed below are not a representation of the views of my broker, the brokerage (which I will not mention). The opinions expressed below are my opinions and mine alone. My broker actually asked me not to write this blog.]
The biggest news in real estate over the last few months is the NAR settlement agreement. I finally got around to reading it. It’s 108 pages long and full of legal jargon. If you suffer from insomnia, and you need something that will put you to sleep, I have included a link to it HERE. The main portion that applies to real estate brokers and agents is found in paragraph 58. For the most part, what NAR and your local MLS have told you about the settlement is how it is going to be from now on. Listing brokers/agents cannot advertise on the MLS that the seller is willing to pay the buyer’s broker/agent a commission on the sale of the property, and the listing agent/broker cannot mention the amount of the potential compensation in the MLS listing.
One of the common complaints from brokers and agents about this new situation is, “What about VA buyers? Who will represent them if the broker/agent doesn’t know if they are going to paid for their services?” This is a valid concern. By law, a veteran using a VA loan cannot pay his broker/agent a commission. I love and respect our veterans as much as anybody, but if I’m going to drive a client around looking at multiple houses over several weeks, negotiate a purchase price and conditions, fill out dozens of documents, and accept personal liability if I mess anything up, I expect to get compensated for my time, energy, and effort. I’m sure most brokers/agents feel the same way. Real estate is my business. I do charity work outside of my business.
However, this problem presents the solution to the issue of listing brokers/agents not being able to being able advertise their client’s willingness to pay a commission split. In most MLS systems, when a broker/agent posts a new listing, you are required to put in basic information about the property, address, neighborhood, schools, number of bedrooms and bathrooms, square footage, etc. One of the required fields is financing options. Common financing options are: cash; conventional mortgage; FHA loan; owner-financing; and last, but not least, VA LOAN!
If a listing broker/agent is advertising that the seller is willing accept a VA loan, he is advertising that his seller is willing to pay the buyer’s broker/agent a commission! If the listing broker/agent is not willing to split the commission, he wouldn’t advertise VA loans as acceptable financing options, because every offer from a veteran’s broker/agent would have to be rejected when a commission split is discussed. It would be a waste of everyone’s time. The best part is, the NAR settlement agreement cannot stop willing sellers from advertising their willingness to accept VA loans, and presumably, pay the buyer’s broker/agent with a commission split! To do so would be an act of discrimination against our veterans!
If you are a buyer’s broker/agent, and you want to find out which sellers are willing to split the commission, you can search the MLS for homes that will accept VA loans (even if your client is not a qualified veteran). Any seller that will accept a VA loan is willing to split the commission. The only question is the amount, “1%, 2%, 3%, or more?” You will still have to negotiate about that, but at least you know it is negotiable.
There are many reasons to honor and celebrate America’s veterans. They have sacrificed greatly for our country, and don’t expect much in return. This is obviously a selfish reason for real estate brokers and agents thank them, but once again, America’s veterans have saved us. May God continue to bless them, and may God bless the USA!
If you are a veteran, and you need an attorney, remember…
Comments