Ask The Experts: Question of the Week
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Question:
Can a buyer pay the agent commission for a buyer’s agent? I know this is not allowed on VA. But is this allowed on FHA or Conventional for Fannie or Freddie?
Answer:
There is no written prohibition in Fannie/Freddie/FHA guidelines that would restrict a buyer (your borrower) from paying their agent’s commission. Of course, this will impact the total cash to close, which must be considered.
It is rare to see this, but perhaps with the recent lawsuit on commissions for real estate, this may become more common (when the buyer is using their own agent) where the buyer/borrower has to come out of pocket to pay their agent rather than being paid by the seller through the price of the home.