B-165673, JAN. 17, 1969

B-165673: Jan 17, 1969

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LEIST: THIS IS IN REPLY TO YOUR REQUEST OF OCTOBER 1. GUERNSEY'S HOME IN LEXINGTON WAS SOLD JUNE 23. IS DESCRIBED AS "SELLERS SHARE OF CLOSING COSTS" AND IS ONE-HALF OF THE CLOSING COSTS APPEARING UNDER THE HEADING OF "ESTIMATED FHA VALUE" ON THE CONDITIONAL COMMITMENT FOR MORTGAGE INSURANCE UNDER THE NATIONAL HOUSING ACT ISSUED BY THE FEDERAL HOUSING ADMINISTRATION (FHA). GUERNSEY STATES THAT HE WAS ADVISED BY SEVERAL BROKERS THAT DUE TO THE SHORTAGE OF MONEY AND AN EXCESS NUMBER OF HOUSES ON THE MARKET THAT IT WAS CUSTOMARY FOR SELLERS TO PAY THE CLOSING COSTS AND THAT HE AGREED TO PAY ONLY $212.50 OF THOSE COSTS. ADVISED AS FOLLOWS: "IF THE HOUSE IS SOLD AT FHA VALUE. THEN IT IS OPTIONAL AS TO WHETHER THE BUYER OR SELLER PAYS THE CLOSING COSTS.

B-165673, JAN. 17, 1969

TO MISS VIRGINIA G. LEIST:

THIS IS IN REPLY TO YOUR REQUEST OF OCTOBER 1, 1968, REFERENCE AD:F:F:V, FOR A DECISION AS TO THE ALLOWABILITY OF THE CLAIM OF MR. F. L. GUERNSEY FOR REIMBURSEMENT OF CERTAIN REAL ESTATE EXPENSES INCIDENT TO HIS TRANSFER OF OFFICIAL STATION FROM LEXINGTON, KENTUCKY, TO LOUISVILLE, KENTUCKY, ON AUGUST 14, 1966.

MR. GUERNSEY'S HOME IN LEXINGTON WAS SOLD JUNE 23, 1967, AND HE HAS BEEN PAID FOR THE BROKER'S COMMISSION, REVENUE STAMPS, PREPARATION OF DEED, AND APPRAISAL FEES. THE AMOUNT OF $212.50, PREVIOUSLY DISALLOWED AND RECLAIMED HEREWITH, IS DESCRIBED AS "SELLERS SHARE OF CLOSING COSTS" AND IS ONE-HALF OF THE CLOSING COSTS APPEARING UNDER THE HEADING OF "ESTIMATED FHA VALUE" ON THE CONDITIONAL COMMITMENT FOR MORTGAGE INSURANCE UNDER THE NATIONAL HOUSING ACT ISSUED BY THE FEDERAL HOUSING ADMINISTRATION (FHA). EXCLUDING APPRAISAL FEES PREVIOUSLY PAID AND NONREIMBURSABLE ITEMS, SUCH AS PROPERTY TAXES, THE AMOUNT CLAIMED APPEARS TO BE PART OF THE MORTGAGE TITLE AND SERVICE FEES NORMALLY ALLOWED THE PURCHASER.

IN MAKING HIS RECLAIM MR. GUERNSEY STATES THAT HE WAS ADVISED BY SEVERAL BROKERS THAT DUE TO THE SHORTAGE OF MONEY AND AN EXCESS NUMBER OF HOUSES ON THE MARKET THAT IT WAS CUSTOMARY FOR SELLERS TO PAY THE CLOSING COSTS AND THAT HE AGREED TO PAY ONLY $212.50 OF THOSE COSTS. IN THIS CONNECTION THE FHA OFFICE IN LOUISVILLE IN A LETTER DATED SEPTEMBER 6, 1968, ADVISED AS FOLLOWS:

"IF THE HOUSE IS SOLD AT FHA VALUE, NOT TO INCLUDE CLOSING COSTS, THEN IT IS OPTIONAL AS TO WHETHER THE BUYER OR SELLER PAYS THE CLOSING COSTS. FREQUENTLY THEY ARE SPLIT BETWEEN BUYER AND SELLER, AND THIS WAS TRUE IN JUNE, 1967.'

REIMBURSEMENT OF EXPENSES INCURRED INCIDENT TO THE SALE OF REAL ESTATE MAY BE MADE UNDER THE PROVISIONS OF SECTION 4.2 OF BUREAU OF THE BUDGET CIRCULAR NO. A-56 ONLY IF THE EXPENSES ARE CUSTOMARILY PAID BY THE SELLER. WHEN IT WOULD NOT BE UNUSUAL FOR THE PURCHASER TO PAY HIS OWN CLOSING COSTS THE SELLER MAY NOT BE REIMBURSED FOR SUCH COSTS, EVEN THOUGH HE ASSUMES THEM BECAUSE IT IS EXPEDIENT AT A PARTICULAR TIME TO DO SO. B- 165202, SEPTEMBER 30, 1968. THE USE OF THE WORD "FREQUENTLY" IN THE FHA LETTER DOES NOT INDICATE THAT THE SELLER CUSTOMARILY SPLITS THE CLOSING COSTS WITH THE PURCHASER.

ACCORDINGLY, ON THE PRESENT RECORD, THE VOUCHER, RETURNED HEREWITH, MAY NOT BE CERTIFIED FOR PAYMENT.