Mortgage Lending FAQ for Real Estate Commissions – Navigating Common NAR Settlement Questions

Mortgage Lending FAQ for Real Estate Commissions – Navigating Questions in Light of the NAR Settlement

Do you know the answer to these frequently asked real estate commission questions?

With the recent National Association of Realtors (NAR) settlement reshaping how real estate commissions are handled, homebuyers, sellers, and agents are experiencing new dynamics in the real estate market. As a result, we have been fielding questions about how these changes impact both the mortgage process and overall buying experience.

In today’s short video I will walk you through four commonly asked questions we receive on real estate commissions from the mortgage perspective and help separate fact from fiction.

But before we get started, don’t forget to take advantage and download our newest Loan Comparison Flyer with the link below. This free guide breaks down each program side by side, explains allowable seller concessions, and is a resource tool for both homebuyers and Realtors alike.

Mortgage Lending FAQ for Real Estate Commissions

Q. Can Real Estate Commissions be included with a USDA loan?
A. Yes

Generally speaking, loan programs will not allow a homebuyer to automatically “roll-in” or include closing costs or real estate commissions as part of the loan amount.

However, unlike FHA, VA, or Conventional loans, in cases where the appraised value is higher than the sales price, a USDA loan can be increased up to that value and roll-in reasonable and customary closing costs which does include real estate commission!

Remember that this does not happen automatically, and it will depend on if the appraised value is higher than the sales price.

Q. If a seller agrees to pay a homebuyer’s closing costs, can those seller concessions also be used to pay real estate commission?
A. Yes

Seller concessions can be applied towards payment of real estate commissions along with any other reasonable and customary closing costs.

• We would not require anything additional to be written into the sales contract for this scenario, and
• It is best practice to provide all of your brokerage agreements to the lender and title company so they can properly draft all documents.

Q. If a seller agrees to compensate a Buyer’s Broker, does this amount count against the maximum seller concession contribution limit?
A. No

• A seller’s agreement to compensate a buyer’s broker does not count against the interested party contribution limit (seller concession) that a seller can provide.
• Maximum allowed seller concessions will vary based on loan program. (e.g., 6% of the sales price for FHA & USDA Loans)

Q. Do VA Loans allow the veteran to pay a Buyer’s Broker compensation?
A. Yes

• VA published Circular 26-24-14 which authorized a temporary local variance to their long standing prohibition.
• Effective 8/10/24, veterans may now pay a Buyer’s Broker compensation!
• With this important change, Conventional, FHA, USDA, and now VA, all permit the homebuyer to pay Buyer Broker compensation.

Summary – Mortgage Lending FAQ for Real Estate Commissions

The real estate commission structure is evolving, and buyers need to stay informed about how these changes affect their mortgage and homebuying plans. Working closely with both a trusted mortgage lender and real estate agent will provide the guidance necessary to navigate this new landscape. Be sure to ask the right questions, review your budget, and consider all options available to make the most informed decision.

As an FHA, VA, and USDA Approved Lender, we will walk you through the qualifying process step-by-step. Just call, text, or email to discuss your scenario and let us show you the “Metroplex” difference!

Call/Text: (863) 593-2001
800-806-9836 Ext. 280
SeanS@MPLX.org

Thank you again for forwarding and sharing today’s video with any friends, family, co-workers, or clients who are looking to buy, sell, or refinance!
As always, I want everyone to make it a great day and look forward to seeing you right here for the next tip of the week!

P.S. – You can download our “Loan Comparison Flyer” by CLICKING HERE.