Veterans: The VA Just Changed the Rules on How You Pay Your Real Estate Agent — Here's What That Means for Your Closing

What Just Changed

As of August 10, 2024, the Department of Veterans Affairs updated its rules: Veterans using a VA-guaranteed home loan can now pay their buyer's agent directly — a capability that was previously prohibited under the program's rules¹³.

This isn't a favor the VA is doing for real estate agents. It's a direct response to the National Association of REALTORS® (NAR) settlement, which fundamentally changed how buyer-broker compensation gets negotiated and disclosed¹. Before the settlement, it was common practice for sellers to pay both their own agent and the buyer's agent — and Veterans using VA loans were legally unable to pay buyer-broker fees out of pocket. After the settlement, that norm is shifting, and the VA moved quickly to make sure Veterans weren't frozen out of the market³.

Why the VA Made This Move

Before August 10, if a seller refused to cover the buyer's agent, a Veteran with a VA loan had a problem: they technically couldn't pay the fee themselves¹. In a market where buyer-broker compensation is increasingly being negotiated differently post-settlement, Veterans could have been placed at a disadvantage — unable to make offers that included coverage of their own agent's commission¹³.

The VA's fix is straightforward: lift the restriction, let Veterans pay, and keep them competitive³.

What Veterans Can Do Now

Here is what the new flexibility actually means for your transaction:

You can pay your buyer-broker fee — but you're not required to. The VA is clear: you can still ask the seller to cover this cost at closing, just as Veterans always could¹². The update doesn't force you to pay out of pocket; it simply removes the prohibition that was unique to VA loans.

You must sign a written agreement with your agent before touring homes. The NAR settlement requires all buyers to have a written contract with their agent that spells out the fee and the services provided². This contract must include the specific compensation amount or rate, how it will be determined (flat fee, percentage, or hourly), a clause preventing your agent from collecting more from other sources than you've agreed to, and a statement that fees are fully negotiable².

All fees must still be "reasonable and customary" for your local market. The VA didn't remove this safeguard — it's still in place¹. If an agent is quoting you a number that seems out of line with local norms, that's negotiable.

Seller concessions are still available. Sellers can offer up to 4% of the home's appraised value in concessions, which can include paying your buyer-broker fee². If a seller is willing to cover your agent, that conversation should happen before you sign anything.

What Sellers Can Still Do

The settlement didn't eliminate seller-paid buyer-agent compensation — it just changed how it's disclosed. Sellers can still offer to pay your agent; they just can't list that compensation on the MLS². That offer can appear on other platforms, in written offers, or be negotiated directly². Ask your agent whether the listing agent has indicated the seller is willing to cover buyer-broker fees — that information may exist but won't appear in the usual search results.

What This Does NOT Mean

This is not the VA requiring you to pay your agent. The VA explicitly encourages Veterans to negotiate fees and to ask sellers to pay¹². The change simply gives you an additional option in a shifting market.

The VA also flagged that this is a temporary measure while it monitors how the settlement affects the broader brokerage market¹³. Future rulemaking may further adjust how buyer-broker fees work for VA loans, and new commission models may emerge that change the negotiation landscape further¹.

Your Action List Before You Submit an Offer

1. Ask your agent about compensation upfront. Before you sign a buyer's representation agreement, discuss what a reasonable fee looks like in your market. You're negotiating this directly now — don't leave it unaddressed.

2. Include buyer-broker fee coverage in your offer. Whether you're asking the seller to pay it or offering to cover it yourself, make it explicit in your purchase contract. Ambiguity benefits no one.

3. Verify the fee is within local norms. Your agent should be able to cite comparable transactions that support the fee being asked. If they can't, push back.

4. Know your closing cost ceiling. Seller concessions max out at 4% of appraised value. If your buyer-broker fee plus other closing costs exceed that, you'll need to plan for cash at closing — something a VA loan doesn't cover the same way.

5. Work with an agent who knows VA loans. The VA specifically recommends finding real estate professionals experienced with the program¹. They're the ones who understand how these rules interact with VA-specific requirements like funding fees and entitlement.

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The bottom line: the VA acted to protect your buying power in a market being reshaped by the NAR settlement. The change gives you flexibility, not an obligation. Use it.