I'm writing all this so you don't get screwed when you buy a house using your VA HOME LOAN BENEFITS.
I have been a REAL ESTATE AGENT in Maryland for many years now.
As you know, using your VA benefits to purchase a home is one of the greatest benefits and thank-yous we as a country can give to you after you loyally and dutifully served your country.
Federal Law dictates what benefits are included, and what you may or may not pay for, etc.
There are certain items that are expressly prohibited by the law that a Veteran may not be charged if you are getting a VA loan. This includes VA buyers shall not not be charged a buyer brokerage fee - this includes a commission, “administrative fee” or “flat fee”.
The logic behind this is that most homes are listed on the internet where they are easily found and in multiple listing services where the seller side pays commission to the buyer broker/agent. So you should have to pay nothing out of pocket to buyer brokerages/agents.
A mischievous little practice has developed now where buyer brokerages/ agents know they cannot collect from you as a Veteran (like they would legitimately from other buyers) a “flat” or an “admin” fee, so they are hiding it in plain sight on the VA Loan Addendum as something labeled as a “non allowable lender fee” that a seller can opt to pay for.
However, the buyer brokerage/agent flat/admin fee is NOT a lender fee.
The buyer agents are expecting sellers to pay them more than what is offered to them on the multiple list. This makes it more expensive for the sellers to sell to Veterans, causing a disadvantage to you. MOST of these fees are in the hundreds of dollars! Since Veterans are explicitly forbidden from being charged these types of fees, why would sellers want to pay the other side’s agents more? The sellers would be paying for something that NO ONE HAS TO PAY.
Additionally, in Maryland, the attempt to require seller to pay more in compensation than what is listed in the MLS is both an MLS agreement violation and an ethical violation.
Some very unscrupulous buyer broker/agents out there are dictating to sellers and listing agents that IF their flat/admin fees are not paid with your offer on the house, *you* will withdraw your offer. You may not even know this is happening. They may tell you your offer was rejected because they will want you to find another home where they can get paid more money.
It is utterly unfair to you as a Veteran and as a consumer that you could lose out on your dream home, or get a decent price on a home, because your buyer agent got greedy.
PLEASE PLEASE PLEASE scrutinize your buyer agency agreements that you do not get charged an additional flat fee if you use a VA loan to purchase and PLEASE PLEASE PLEASE review the VA Loan Addendum to Contracts when you submit your offer on a home to make sure seller is not being asked to pay your broker/agent’s flat/admin fee. SPEAK TO YOUR LENDER if there are any “non-allowable” fees that are *required* to be paid to your lender!