A VA Offer Came In. Four Line Items Decide Whether It Costs You More Than the Conventional One.

Not necessarily. Sellers in California commonly cover Section 1 termite clearance and certain fees a veteran cannot pay, but the buyer broker commission rule changed recently and the funding fee belongs to the buyer. The real gap between a VA offer and a conventional one is usually narrower than sellers assume.

Two offers come in at the same price. One buyer is conventional, one is a veteran using a VA loan. The listing agent says the VA offer will cost you more, so you take the other one. That decision gets made constantly around here, and it is often made on information that is several years out of date.

Here are the four line items that actually decide it.

1. Commission, and the one you need to verify

For decades, veterans could not pay their own agent's commission. That forced sellers to cover it or the veteran went unrepresented, and it is the single reason VA offers earned a reputation for costing sellers more.

That restriction has been changing since the NAR settlement took effect in August 2024, and here is where I have to be straight with you. Published sources currently disagree on its exact status. Some describe the change as permanent as of April 2026. Others describe it as a temporary variance with an expiration date that has now passed.

This is the largest dollar figure on your list, often 2.5 to 3 percent of the price, so do not accept anyone's summary of it, including mine. Ask the buyer's lender directly what the current rule is and get the answer in writing before you respond to the offer. A listing agent quoting last year's rule could be costing you a good buyer or costing you thousands.

2. Credits, and the cap most sellers have never heard of

Two separate buckets get confused here constantly.

Ordinary closing costs a seller agrees to pay have no VA cap. Separately, the VA limits what it calls seller concessions, meaning things like paying the buyer's funding fee, paying off their debt, or buying the rate down beyond market, to 4 percent of the appraised value.

There is also a category of non allowable fees a veteran simply cannot pay, which fall to the lender, the seller, or an agent. Lender overhead beyond the 1 percent origination cap sits here. Many VA lenders absorb these routinely, so before assuming they land on you, find out whether this particular lender does.

3. Termite and Section 1, the California item that actually matters

This is the one with real teeth, and it is specific to where you live. California sits in a high termite probability zone, so a VA purchase here requires a full wood destroying organism report and a Section 1 clearance. There is no working around it. No clearance, no funding.

The distinction that decides your cost:

• Section 1 covers active infestation or existing damage. It must be treated and re-inspected before the loan closes.
• Section 2 covers conditions that could invite termites later, like moisture or wood touching soil. Generally not required for VA purposes, though some lenders add their own overlays.

Southern California custom puts Section 1 clearance on the seller. That is custom rather than law, and most purchase contracts here reference it directly. The practical reality reinforces it: the work has to be done before funding, and a buyer is not going to pay for repairs on a house they do not own yet.

Two details that trip sellers up. Treating the problem and getting a letter saying no current activity does not satisfy a VA underwriter. They want the original report, the clearance, and confirmation the work was completed, with zero open items. And under California law a report and clearance are valid four months from the inspection date, so timing matters if your listing sits.

Now the part where outdated advice costs money. The inspection fee itself, usually somewhere around $100 to $200 with the clearance letter adding roughly $75 to $100, used to be prohibited for the veteran to pay. VA Circular 26-22-11 changed that in June 2022. The buyer can pay it now, in any state. Plenty of published guidance still says otherwise, including material dated this year.

4. Repairs, and why VA repairs are a different animal

Sellers tend to lump these together with inspection repairs. They are not the same.

The VA appraisal checks minimum property requirements, which are about safety and soundness. Items that fail those have to be corrected before funding, and there is no crediting your way out of them. That differs from an inspection request, where a credit is a perfectly normal resolution.

The good news is the list is narrower than most people fear. Style, finishes, and cosmetic condition are not MPR items. What gets flagged is deferred maintenance, and a seller who has already handled that has very little exposure here.

Back to those two offers

In San Diego North County, military buyers, veterans, and first time buyers using a VA loan are a large share of the pool. Turning down VA offers on reputation shrinks your buyer pool meaningfully in this market, and the reputation is built on rules that have been changing.

The honest comparison is Section 1 clearance, which you were likely providing anyway by local custom, plus any non allowable fees the lender does not absorb, plus whatever the commission answer turns out to be this month. That is a real number, and it is usually smaller than the one people assume.

If you have a VA offer in front of you and want the actual costs run before you respond, call or text me at (619) 485-8293, or reach me through my Connect page.

Ask the Buyer's Lender This

Two questions before you counter:

• "What is the current rule on the veteran paying their own agent's commission, and can you put that answer in writing?"
• "Which non allowable fees on this file do you absorb as the lender, and which would you expect to land on me?"

Frequently Asked Questions

Does the seller pay more with a VA loan?

Sometimes modestly, mostly through non allowable fees the lender does not absorb. In California the Section 1 clearance is usually the largest item, and local custom already puts that on sellers regardless of loan type.

Can I refuse to provide a Section 1 clearance?

You can decline, but a VA loan will not fund without it, so declining generally ends that transaction. It is worth knowing that before you take a position on it.

Do I have to pay the buyer's funding fee?

No. It is the buyer's cost. It can be negotiated as a concession, which counts against the 4 percent cap, but nothing requires you to cover it.

Can I give a credit instead of doing MPR repairs?

Generally no. Items failing minimum property requirements must be corrected before the loan funds. Inspection requests are different and credits work fine there.

Are VA appraisals stricter than conventional?

They check different things rather than harder things. The focus is safety and soundness, not condition or finishes, and the list is shorter than its reputation suggests.

Save this for the next VA offer that comes across your desk. More on selling, VA loans, and PCS moves in San Diego North County is on the blog.

This content is for informational purposes only and is not legal or financial advice. VA policies, fee rules, and local customs vary and change, and at least one item discussed here is currently reported inconsistently across published sources. Confirm all figures and current rules with the buyer's lender and your own broker before relying on them. All real estate services comply with NAR, HUD, and California DRE regulations.