VA buyers are at a disadvantage with NAR settlement

VA Home loan

VA buyers are at a disadvantage with NAR settlement

VA buyers are at a disadvantage with NAR settlement


We are starting to see who some of the winners and losers will be with the NAR $418 million settlement. First, it is obvious that the law firm that brought this case will get a windfall of 33 percent of 418 million…that amounts to $137,940,000.

Under the terms of the settlement realtors will be required to have a written agreement with the buyers stipulating the cost of those services and this is supposed to create greater transparency. But Dr. Ken H. Johnson who is a real estate economist with Florida Atlantic University’s College of Business said, “I don’t see how the listing agent not disclosing what the seller is willing to pay to the agent working with the buyer creates a more competitive market.”  And he said, “This settlement creates confusion, increases deal complexity, and possibly violates current state laws involving the interaction of real estate agents, buyers and sellers in the marketplace.” John added, “No longer advertising buyer agent commissions will only create a more confused and drawn-out transaction process as buyers, sellers and agents will have to negotiate the fee, who will pay for it, and how much will be paid by each party. Due to this added level of complexity, buyers will almost certainly have to negotiate with more sellers before they find the deal they are satisfied with. Thus, the house hunting period will extend for the average buyer.”

This settlement affects VA buyers in a negative way since military personnel using a VA home loan cannot compensate their realtor directly. In so they can only look at homes that seller’s will pay their buyers agent commission and that may limit their options.

The other concern for a VA buyer and buyers of other forms of financing is if they go to the listing agent directly to make an offer and then they do not receive exclusive representation in negotiation and in many cases will be at a disadvantage unless they are seasoned in all aspects of a real estate transaction.

We are just now seeing who this settlement will impact the most and who might be hurt or benefit by this. They say this will all come into play in July but look for more information from me when we know more.


Jeff Anderson

The Anderson Team

RE/MAX Results


No Comments

Sorry, the comment form is closed at this time.