News
Veterans Affairs Removes Compensation Hurdle for Military Buyers
The Department of Veterans Affairs officially announced Tuesday a temporary policy allowing VA home buyers to compensate their real estate agent directly. The department says it will determine whether a formal rulemaking process is necessary. The move brings relief to VA home buyers, whom the National Association of REALTORS® has been working feverishly to support in recent months. NAR launched an “all-hands” effort earlier this year to change the department’s previous rule, which prohibited VA borrowers from paying a “brokerage fee or commission in connection with the services” of a real estate professional. The rule presented a potential hardship for VA buyers under NAR’s proposed settlement agreement. Under the VA’s new temporary policy, “eligible veterans, active-duty service members and surviving spouses who use their VA home loan benefits can pay for certain real estate buyer broker fees when purchasing a home,” the VA said in a statement Tuesday. “This update is intended to ensure VA’s programs continue to promote access to homeownership for veterans.” Housing for veterans remains a top advocacy issue for NAR. “NAR launched an all-hands advocacy effort on this issue, meeting with VA officials, engaging with lawmakers and rallying our industry partners to ensure this prohibition was lifted,” says NAR Chief Advocacy Officer Shannon McGahn. “Without this change, thousands of veteran buyers could be denied access to professional representation in their pursuit of the American Dream of homeownership. Taking this extra step ensures veterans have the same opportunity as others to compete in a tight housing market. We applaud the VA for recognizing this danger and acting swiftly to protect veterans.” The VA home loan guaranty program is a vital homeownership tool that provides military veterans with a centralized, affordable and accessible method of purchasing homes with no down payment as a benefit for their service to the nation. It’s also the only program that explicitly banned buyers from directly paying for professional real estate representation, NAR President Kevin Sears said in a statement. “We applaud the VA for revising this policy and allowing veterans and active-duty service members the same advantages as other buyers in a competitive real estate market,” Sears said. “We look forward to continuing this conversation, and our 1.5 million members stand ready to support the VA in whatever way possible to protect the brave men and women who serve this country and ensure they are given the equal opportunity to achieve the American Dream of homeownership.” The VA and NAR say they will continue to monitor the evolving homebuying market, as practice changes take effect Aug. 17, and will issue updates as they occur. The VA adds that it “encourages veterans to negotiate buyer broker fees with their real estate professional. VA buyers can also still ask sellers to cover the buyer broker’s compensation at closing.” |
FOR IMMEDIATE RELEASE
April 1, 2024
Recent National Association of Realtor Settlement Will Set Back Black Homeownership
Once again, we, the Consolidated Board of Realtists believe The National Association of Realtors (NAR) is on the wrong side of history. Just as they stood against the 1968 Fair Housing Act, Friday’s settlement stands as an affront to Black and other underserved homebuyers and the predominantly minority real estate agents who represent the homebuyers.
“The biggest impediment to Black homeownership is down payment and closing cost funds. This settlement serves to shift the buyer’s agent commission payment directly to the homebuyer when industry tradition and practice is that the listing agent shares the selling commission with the agent who is helping the homeowner sell the home. This change is devastating to Black homebuyers,” said Mark Alston, Legislative Committee Chair, Consolidated Board of Realtist.
For Black homebuyers, this is bad news. In this country, the average net wealth of Black households is $27,000 which represents over nine times less than the $250,000 average net wealth of White households. Black families have 68% less in liquid assets than their White counterparts along with fewer opportunities to receive financial assistance from family members. Down payment and closing costs are hard enough of to save. Adding the buyer’s agent commission to the ledger puts homeownership out of reach.
According to The National Association of Realtors the average Black Realtor earns $16,700 per year which is three times less than the $49,400 a White Realtor averages. Historically, Black people are buyers’ agents. U.S. White homeownership is almost 74%, Black homeownership is 45%. The opportunity to be the seller’s agent is less for Black agents just based upon the overall ownership percentages.
“We believe this settlement will most assuredly have a racially disparate impact upon Black homeownership,” said Lyric Armstrong, 44th President, Consolidated Board of Realtists, Los Angeles, CA.
The American dream of homeownership is not dead in the Black community, it just keeps getting pushed farther away. We are disappointed the NAR did not fight for us. It would have been better to lose with the dignity of being right and representing all of your membership, than to settle in shame.
Contact: Mark Alston, Legislative Committee Chair Lyric Armstrong, President
(310) 908-0070 (213) 444-6336
Malston55@yahoo.com Lyric@LJAestates.com
MESSAGE FROM THE PRESIDENT
