Are you a house-hunting self-starter? Do you enjoy going neighborhood to neighborhood looking at "for sale" signs? Some people enjoy this process, others don't. Some prefer to look in person, others begin searching online. And still others like to get the help of a local real estate agent.
Agents and brokers can be helpful for some people looking for that perfect neighborhood. Those who want to buy a home with a VA mortgage are free to take advantage of these or similar services. 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?
The VA Lender's Handbook has guidelines for broker and agent fees. These guidelines are found in Chapter Eight, Section Three, which says, "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."
The VA does not discourage or forbid a VA borrower from using such services, but the VA rulebook is clear on fees charged to the borrower in connection with those services. In addition to the rules mentioned above, VA guidelines also state:
"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."
There is also a similar rule 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. A borrower is free to pay for and retain his or her own legal counsel, but the bank's legal fees are not the applicant's responsibility, according to this paragraph in the VA Lender's Handbook:
"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."