[Request for Advance Decision Concerning DOD Employee's Claim for Reimbursement of Relocation Expenses]

The Department of Defense (DOD) requested a decision on whether it could reimburse an Air Force employee for the costs of the escrow closing fee and title insurance in a sale-by-owner transaction. GAO noted that: (1) the employee and seller each paid half of the closing fee, which was consistent with local customs; and (2) the employee was required to purchase title insurance to obtain a second mortgage. GAO held that DOD could reimburse the employee for: (1) the entire closing fee he incurred; and (2) only a portion of the title insurance fee since the local custom required only that the employee purchase insurance for the second mortgage, not the full purchase price of the home. Accordingly, DOD should reimburse the employee for his entire closing fee and for a portion of the title insurance fee not to exceed the local customary amount.