AUSTIN, Texas —
Recently, the National Association of Realtors reached a lawsuit settlement to make the relationship between agents and those looking to buy and sell homes more transparent. But one Central Texas agent is concerned about what this change could mean for veterans.
The settlement opens the discussion over commission and how much someone selling or buying a house must pay the real estate agent representing them.
That's always been negotiable – whether people knew it or not – but for veterans using a VA loan, there is less wiggle room.
Myka Allen-Johnson, the owner of Elevate Texas Real Estate, has been an agent for more than 20 years and even teaches other realtors.
She explained that, historically, people selling a house have hired a real estate agent for help. Before this settlement, some people assumed the seller also had to pay the commission fee for the buyer's agent.
She said while it wasn’t mandatory, paying your buyers' agent's commission makes the process faster – and for veterans, it is necessary. One of the requirements for a VA loan is the veteran cannot pay any fees or commission charged by an agent.
If the seller doesn't pay for a veteran homebuyer's real estate agent, then the veteran may have to purchase the home without an agent looking out for their best interest.
"I just don't want the people who work the hardest for our freedom in this country to be damaged or harmed in any way," Allen-Johnson said. "We cannot allow our veterans to go unrepresented. They already get damaged. People already have a bad connotation of the VA loan and go, 'It's going to be difficult. It's too expensive to do this.'"
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Veterans who recently purchased homes in Central Texas with VA loans say since the process can be so complicated, working with an agent is crucial.
"I'm extremely grateful that we were able to have that. And a lot of people, we know that when this rule go[es] in effect, they're going to, they're going to veer away from actually want[ing] to buy a home because the fear of going into it and having to do that stuff themselves is already a big process itself," Robert Claiborne, who just closed on his home Thursday, said.
A real estate agent wouldn't be able to work for a veteran buying a home for free because if they aren't paid, their realtors’ insurance won't cover the purchase.
"What's coming down effectively negates this particular benefit of the American dream. Our nation's veterans have sacrificed, they come back, the government acknowledges their sacrifice by giving them a benefit. But with this new litigation, it effectively negates that benefit," James Banks, another veteran who bought a Central Texas home using a VA loan, said.
Since the commissions have always been negotiable, the seller has always been able to refuse to pay the buyer's agent's fees. But Allen-Johnson said with the news of the settlement, people may have a knee-jerk reaction and refuse to pay them to save money, without considering the consequences and what it could mean for veterans.