B-165202, SEP. 30, 1968
Highlights
SHELBY: THIS IS IN REPLY TO YOUR MEMORANDUM OF AUGUST 29. SANCHEZ CLAIMED AND WAS REIMBURSED $81.75 DESCRIBED AS "PURCHASER'S CLOSING COSTS PAID BY SELLER.'. SANCHEZ WAS PAID AFTER THE RECEIPT OF ADVICE FROM AN ALBUQUERQUE TITLE COMPANY WHICH WAS IN PERTINENT PART AS FOLLOWS: "IN MANY CASES THE SELLER PAYS ALL OF THE PURCHASERS (SIC) CLOSING COSTS. THIS IS THE CASE ON NEARLY ALL NEW LOANS. THAT THE MONEY SITUATION IS TIGHT AND WITH SO MANY HOMES ON THE MARKET. YOU NOW QUESTION WHETHER PAYMENT OF THE CLAIM WAS PROPER IN VIEW OF SECTION 4.2D OF BUREAU OF THE BUDGET CIRCULAR NO. A-56 WHICH PROVIDES THAT COSTS OF THE TYPE INVOLVED MAY BE REIMBURSED ONLY IF THEY ARE CUSTOMARILY PAID BY THE PURCHASER OR SELLER AS THE CASE MAY BE IN THE LOCATION WHERE THE TRANSACTION TOOK PLACE.
B-165202, SEP. 30, 1968
TO MR. HENRY T. SHELBY:
THIS IS IN REPLY TO YOUR MEMORANDUM OF AUGUST 29, 1968, REFERENCE 9132-S, CONCERNING THE PAYMENT MADE TO MR. JOHN SANCHEZ, AN EMPLOYEE OF YOUR AGENCY, TO REIMBURSE HIM CERTAIN CLOSING COSTS HE INCURRED IN CONNECTION WITH THE SALE OF HIS RESIDENCE AT HIS OLD OFFICIAL STATION INCIDENT TO HIS TRANSFER FROM ALBUQUERQUE, NEW MEXICO, TO TUCSON, ARIZONA, IN OCTOBER 1967.
MR. SANCHEZ CLAIMED AND WAS REIMBURSED $81.75 DESCRIBED AS "PURCHASER'S CLOSING COSTS PAID BY SELLER.' THE CLAIM OF MR. SANCHEZ WAS PAID AFTER THE RECEIPT OF ADVICE FROM AN ALBUQUERQUE TITLE COMPANY WHICH WAS IN PERTINENT PART AS FOLLOWS:
"IN MANY CASES THE SELLER PAYS ALL OF THE PURCHASERS (SIC) CLOSING COSTS. THIS IS THE CASE ON NEARLY ALL NEW LOANS. THE REASON BEING, THAT THE MONEY SITUATION IS TIGHT AND WITH SO MANY HOMES ON THE MARKET, IT HELPS IN FINDING A BUYER WITH ENOUGH FUNDS.'
YOU NOW QUESTION WHETHER PAYMENT OF THE CLAIM WAS PROPER IN VIEW OF SECTION 4.2D OF BUREAU OF THE BUDGET CIRCULAR NO. A-56 WHICH PROVIDES THAT COSTS OF THE TYPE INVOLVED MAY BE REIMBURSED ONLY IF THEY ARE CUSTOMARILY PAID BY THE PURCHASER OR SELLER AS THE CASE MAY BE IN THE LOCATION WHERE THE TRANSACTION TOOK PLACE. YOU BELIEVE THE WORD "CUSTOMARILY" IN SECTION 4.2D MAY PROHIBIT REIMBURSEMENT WHEN THE PURCHASER OR SELLER ASSUMES RESPONSIBILITY FOR PAYMENT OF CHARGES OF THE OTHER PARTY BECAUSE IT MAY BE EXPEDIENT AT A PARTICULAR TIME TO DO SO.
NOTWITHSTANDING REAL ESTATE MARKET CONDITIONS MAY RESULT IN THE SELLER ASSUMING THE PURCHASER'S CLOSING COSTS, THE SELLER MAY NOT BE REIMBURSED UNLESS IT APPEARS THAT IT WOULD BE UNUSUAL FOR THE PURCHASER TO PAY HIS OWN CLOSING COSTS. B-164604, JULY 29, 1968. THE FACT THAT THE PRACTICE OF A SELLER ASSUMING THE PURCHASER'S CLOSING COSTS BY CONTRACT IS QUITE COMMON DOES NOT RAISE IT TO THE STATUS OF A CUSTOM. B-164181, JULY 22, 1968. IN VIEW OF THE STATEMENT OF THE TITLE COMPANY, AS QUOTED ABOVE, IT APPEARS (1) THAT IT WOULD NOT BE UNUSUAL FOR THE PURCHASER IN THE ALBUQUERQUE AREA TO PAY HIS CLOSING COSTS, AND (2) THAT THE SELLER'S ASSUMPTION OF THE PURCHASER'S COSTS RESULTED FROM THE TIGHT MONEY SITUATION AT THE TIME OF SALE.
IN THE ABSENCE OF MORE SUBSTANTIAL EVIDENCE SHOWING THAT IT WAS A LOCAL CUSTOM FOR THE SELLER TO ASSUME THE PURCHASER'S CLOSING COSTS, THE PAYMENT OF $81.75 SHOULD BE RECOVERED.