B-163253, FEB. 27, 1968
Highlights
EMPLOYEE WHO HAD TO PAY A $10.00 MULTIPLE LISTING FEE TO THE BROKER WHO HAD EXCLUSIVE AGREEMENT TO SELL HOME AT OLD OFFICIAL STATION MAY HAVE FEE REGARDED AS A PART OF THE TRANSACTION GIVING THE REALTOR AN EXCLUSIVE TO SELL RATHER THAN AS A FEE ARISING FROM AN EARLIER INDEPENDENT EFFORT BY THE SELLER TO DISPOSE OF THE PROPERTY AND THEREFORE SUCH FEE IS REIMBURSABLE UNDER SEC. 4.2B OF BOB CIRCULAR A 56. WHERE REALTY COMPANY IN ORDER TO FACILITATE SALE ABSORBED ONE-HALF OF THE SELLER'S COST OF THE MORTGAGE FEE (2 PERCENT) BY PAYING AMOUNT OUT OF COMMISSION AND THEREFOR SINCE EMPLOYEE WAS NOT REQUESTED TO PAY TOTAL COMMISSION HE MAY BE REIMBURSED FOR ONLY AMOUNT ACTUALLY PAID. THIS FEE WAS PAID BY MR.
B-163253, FEB. 27, 1968
EMPLOYEES - TRANSFERS - PUBLIC LAW 89-516 - HOME SALE/PURCHASE EXPENSES DECISION TO CERTIFYING OFFICER OF FAA CONCERNING REIMBURSING EMPLOYEE FOR MULTIPLE LISTING SERVICE INCIDENT TO SALE OF HOUSE AT OLD OFFICIAL STATION IN ATLANTIC CITY. EMPLOYEE WHO HAD TO PAY A $10.00 MULTIPLE LISTING FEE TO THE BROKER WHO HAD EXCLUSIVE AGREEMENT TO SELL HOME AT OLD OFFICIAL STATION MAY HAVE FEE REGARDED AS A PART OF THE TRANSACTION GIVING THE REALTOR AN EXCLUSIVE TO SELL RATHER THAN AS A FEE ARISING FROM AN EARLIER INDEPENDENT EFFORT BY THE SELLER TO DISPOSE OF THE PROPERTY AND THEREFORE SUCH FEE IS REIMBURSABLE UNDER SEC. 4.2B OF BOB CIRCULAR A 56. WHERE REALTY COMPANY IN ORDER TO FACILITATE SALE ABSORBED ONE-HALF OF THE SELLER'S COST OF THE MORTGAGE FEE (2 PERCENT) BY PAYING AMOUNT OUT OF COMMISSION AND THEREFOR SINCE EMPLOYEE WAS NOT REQUESTED TO PAY TOTAL COMMISSION HE MAY BE REIMBURSED FOR ONLY AMOUNT ACTUALLY PAID.
TO MR. R. J. SCHULLERY:
WE REFER TO YOUR LETTER OF JANUARY 3, 1968, REFERENCE MS-430 REQUESTING OUR DECISION AS TO WHETHER YOU MAY CERTIFY FOR PAYMENT A VOUCHER IN FAVOR OF MR. CHRISTOPHER S. BARRETT, AN EMPLOYEE OF THE FEDERAL AVIATION ADMINISTRATION, FORMERLY STATIONED AT ATLANTIC CITY, NEW JERSEY, FOR EXPENSES IN CONNECTION WITH A REAL ESTATE TRANSACTION UPON CHANGE OF OFFICIAL STATION UNDER PUBLIC LAW 89-516, 80 STAT. 323, NOW CODIFIED UNDER 5 U.S.C. 5724A.
THE VOUCHER REPRESENTS A CLAIM FOR $10 FOR COST OF LISTING MR. BARRETT'S DWELLING WITH THE MULTIPLE-LISTING SERVICE OF THE GREATER ATLANTIC CITY AND COUNTY REAL ESTATE BOARD. THIS FEE WAS PAID BY MR. BARRETT TO THE BROKER WITH WHOM HE NEGOTIATED AN EXCLUSIVE AGREEMENT TO SELL THE PROPERTY, WHO RECEIVED IT ON BEHALF OF THE MULTIPLE-LISTING SERVICE. YOU INDICATE THE EXISTENCE OF A CUSTOM IN THIS AREA THAT THE SELLER PAY THE MULTIPLE-LISTING SERVICE FEE AS WELL AS THE SALES COMMISSION. HOWEVER, YOU EXPRESS DOUBT AS TO WHETHER SUCH FEE SHOULD NOT BE REGARDED AS INCLUDED IN THE COMMISSION.
WITH RESPECT TO THE PAYMENT OF ADVERTISING EXPENSES SECTION 4.2B OF BUREAU OF THE BUDGET CIRCULAR NO. A-56 PROVIDES AS FOLLOWS: "B. OTHER ADVERTISING AND SELLING EXPENSES. COSTS OF NEWSPAPER, BULLETIN BOARD, MULTIPLE-LISTING SERVICES, OR OTHER ADVERTISING FOR SALE OF THE RESIDENCE AT THE OLD OFFICIAL STATION ARE REIMBURSABLE IF THE EMPLOYEE HAS NOT PAID FOR SUCH SERVICES IN THE FORM OF A BROKER'S FEE OR REAL ESTATE AGENT'S COMMISSION. CUSTOMARY COSTS OF APPRAISAL ALSO MAY BE REIMBURSED.' THE RECORD INDICATES THAT THE EXPENSE OF LISTING THE PROPERTY IN QUESTION WITH ALL THE MEMBERS OF THE MULTIPLE-LISTING SERVICE WAS NOT INCLUDED IN THE BROKER'S COMMISSION. THE PAYMENT OF THIS FEE WAS CONTEMPORANEOUS WITH THE EXECUTION OF THE CONTRACT WITH COUNTRY-SHORE REALTY GIVING THAT COMPANY AN EXCLUSIVE AGENCY TO SELL THE PROPERTY AND AGREEING TO PAY A COMMISSION OF 6 PERCENT. IT WAS AN EXPENSE DIRECTLY RELATED TO THE SALE OF THE PROPERTY UNLIKE OTHER CASES WHERE THE SELLER HAD INCURRED ADVERTISING EXPENSES ON HIS OWN PRELIMINARY TO TURNING THE PROPERTY OVER TO AN AGENT FOR SALE WHEN HIS OWN EFFORTS WERE UNSUCCESSFUL. CF. B-161320, SEPTEMBER 5, 1967 (COPY ENCLOSED) AND CASES CITED THEREIN. IN VIEW OF THE EXISTENCE OF CUSTOM IN THE AREA FOR A SELLER TO PAY THE MULTIPLE-LISTING SERVICE FEE IN ADDITION TO A COMMISSION, SINCE THE EXPENSE WAS ACTUALLY BORNE BY THE SELLER, AND SINCE THE PAYMENT OF THE FEE WAS PART OF THE TRANSACTION GIVING THE REALTOR AN EXCLUSIVE TO SELL AND NOT ARISING FROM AN EARLIER INDEPENDENT EFFORT BY THE SELLER TO DISPOSE OF HIS PROPERTY IT IS AN ALLOWABLE EXPENSE UNDER SECTION 4.2B OF THE REGULATIONS ABOVE.
YOU INQUIRE ABOUT A FURTHER MATTER INVOLVING THE AMOUNT ALLOWED MR. BARRETT AS REIMBURSEMENT FOR A REAL ESTATE COMMISSION PAID TO THE COUNTRY- SHORE REALTY. THE CONTRACT FOR THE SALE OF MR. BARRETT'S RESIDENCE PROVIDED FOR THE PAYMENT OF A 6 PERCENT COMMISSION ON THE PURCHASE PRICE TO THE COUNTRY-SHORE REALTY, THE LISTING BROKER. THE HOUSE WAS SOLD FOR $27,000 AND THE REALTY COMPANY WAS ENTITLED UNDER CONTRACT TO RECEIVE A COMMISSION OF $1,620, REPRESENTING 6 PERCENT THEREOF. HOWEVER, THE RECORD INDICATES THAT THE REALTY COMPANY ABSORBED ONE-HALF OF A 2 PERCENT MORTGAGE FEE (POINTS) OR $251. THIS IS REFLECTED IN THE CLOSING STATEMENT WHICH SHOWS A COMMISSION DUE THE COUNTRY-SHORE REALTY OF $1,369 AS AN OBLIGATION OF THE SELLER AND AN AMOUNT OF $502 DUE THE ATLANTIC MORTGAGE SERVICE AS A 2 PERCENT MORTGAGE FEE (POINTS).
APPARENTLY, IN ORDER TO FACILITATE THE SALE THE REALTY COMPANY ABSORBED ONE-HALF OF THE SELLER'S COST OF THE MORTGAGE FEE (2 PERCENT) BY PAYING THIS AMOUNT, $251, OUT OF THE COMMISSION TO WHICH IT WAS ENTITLED. SINCE MR. BARRETT WAS NOT ACTUALLY REQUIRED TO PAY A COMMISSION OF $1,620 BUT RATHER AS SHOWN BY THE STATEMENT OF SETTLEMENT ONLY PAID $1,369 FOR THAT PURPOSE, IT IS CONSIDERED THAT THAT IS THE AMOUNT REIMBURSABLE TO THE SELLER AS A COMMISSION EXPENSE.
THE VOUCHER FOR $10 IS RETURNED HEREWITH AND MAY BE CERTIFIED FOR PAYMENT. HOWEVER, MR. BARRETT SHOULD BE REQUIRED TO REFUND THE DIFFERENCE BETWEEN THE AMOUNT PREVIOUSLY ALLOWED HIM AS REIMBURSEMENT OF REAL ESTATE COMMISSION $1,620 AND THE AMOUNT TO WHICH ACTUALLY ENTITLED, $1,369 OR $251. WE ARE RETAINING THE COPIES OF THE PAPERS FURNISHED IN CONNECTION WITH SUCH COMMISSION TRANSACTION.