Reimbursement for Real Estate Expenses

An employee requested reconsideration of his claim for real estate expenses incurred in selling his home incident to a permanent change of station. The issue was whether a seller may be reimbursed for real estate expenses paid on behalf of the purchaser where it is common for the seller to pay such costs but the practice is not an established custom. The claimant sold his residence upon changing his permanent duty station. The real estate agency reported that in that area it was not uncommon for the seller to pay all or part of the purchaser's closing costs. However, the Department of Housing and Urban Development (HUD) reported that while typically the seller paid part or all of the buyer's costs in the area, the practice had not been established as a custom which developed over the years. Certain real estate expenses are payable for the sale of a residence incident to a permanent change of station, but only if they are cutomarily paid by sellers of real estae in the locality where the real estate is located. In determining whether the seller or purchaser customarily pays the particular real estate expense in question, employing offices should obtain technical advice from the local or area HUD office. In the present case, HUD determined at most that it was common for the sellers in the local area to pay a part of the buyer's closing costs, but such current practice had not ripened into a custom. Under these circumstances, GAO denied reimbursement of the seller's expense. Accordingly, the disallowance was sustained.