Moving is a constant in military life. Whether you’re PCSing to a new duty station or transitioning to civilian life, buying or selling a home is often part of the process. Real estate transactions have seen significant shifts, and understanding the rules now in effect for 2025 is crucial for military families. These changes primarily stem from a major industry settlement (the NAR settlement) finalized in late 2024, impacting how real estate agent compensation is handled. Let’s break down what you need to know.
What’s Changing in 2025?
The biggest adjustments revolve around transparency and negotiation, particularly concerning buyer’s agent commissions. Here are the key points:
- No Commission Offers on MLS: Listing agents (who represent sellers) can no longer advertise offers of compensation to buyer’s agents on the Multiple Listing Service (MLS). While sellers can still offer to pay the buyer’s agent commission, this negotiation now happens “off-MLS” – directly between agents, buyers, and sellers.
- Mandatory Written Buyer Agreements: Before an agent can show you homes, you must sign a written agreement. This contract clearly outlines the services the agent will provide and specifies their compensation (how much they charge and who pays). This ensures you understand the terms upfront.
- Increased Negotiation: Commissions have always been negotiable, but these changes emphasize it. Both buyers and sellers now have clearer avenues to discuss and agree upon agent fees.
How Do These Changes Affect Home Buyers?
As a military home buyer, especially if you plan to use your VA loan benefit, pay close attention:
- Potential Direct Payment: Since sellers are no longer required to offer buyer agent compensation via the MLS, you might need to pay your agent directly. Discuss this possibility with your agent from the start. Understand how their fee is structured (e.g., percentage, flat fee, hourly).
- VA Loan Update: Previously, VA rules prohibited veterans from paying their agent’s commission directly. Recognizing the potential disadvantage this created under the new industry rules, the VA issued a temporary policy update (effective August 10, 2024). This update allows veterans using VA loans to pay reasonable and customary buyer-agent fees directly, although these fees cannot be rolled into the loan amount. Ensure your lender and agent understand this temporary VA guidance.
- Budgeting: Factor potential agent fees into your budget alongside your down payment and closing costs.
- Negotiation Power: Your written agreement clarifies your agent’s fee. You can negotiate this fee and also negotiate with sellers to potentially cover some or all of your agent’s compensation through concessions or the offer price.
How Do These Changes Affect Home Sellers?
Military homeowners often face tight timelines when selling due to PCS orders. Here’s how the rules impact you:
- Optional Buyer Agent Compensation: You are not obligated to pay the buyer’s agent. However, choosing not to offer any compensation might reduce the pool of potential buyers, as some may be unable or unwilling to pay their agent directly.
- Strategic Concessions: Offering to pay the buyer’s agent commission (negotiated off-MLS) or offering seller concessions (closing cost assistance) can make your home more attractive, especially in a competitive market or when you need a quick sale. Discuss these strategies with your listing agent.
- Clear Listing Agreement: Your agreement with your listing agent will clearly state their commission. Negotiations primarily focus on this fee and whether you’ll offer any compensation for the buyer’s side.
Why Understanding is Vital for Military Families
Military life demands adaptability. PCS moves often come with limited time for house hunting or selling. Understanding these real estate rules helps you:
- Budget Accurately: Knowing potential costs prevents financial surprises during an already stressful move.
- Negotiate Effectively: Understanding your options empowers you to negotiate terms that fit your unique situation and timeline.
- Leverage VA Benefits Correctly: Knowing the temporary VA policy on commission payments is essential for VA loan users.
- Choose the Right Professional: Work with a real estate agent experienced with military moves, VA loans, and these updated commission structures. They can provide invaluable guidance.
The 2025 real estate landscape requires more direct communication and negotiation regarding agent compensation. By understanding these rules, military buyers and sellers can navigate their transactions more confidently. Always ask questions and ensure you work with a trusted professional who prioritizes your needs during your next move.
