Real Estate Broker's Bonus

A decision was requested as to whether an employee may be reimbursed a portion of a bonus charged by a real estate agent in addition to a 7 percent commission fee charged for the sale of the employee's condominium incident to a permanent change of station. Legislation authorizing the reimbursement of real estate expenses limits that reimbursement to the amount customarily charged in the locality. The employee contended that a 7 percent real estate commission plus a bonus is the customary reimbursement in Prince George's County, Maryland, the location of his condominium. It has been consistently held that regulations require that the amount reimbursed be at the rate charged by all real estate brokers in the area, not the rate charged by the particular broker used by the employee to sell his residence. Recently, GAO accepted the determination that a 7 percent commission is the customary real estate broker's fee for a condominium sale in the Washington, D.C., area. The employee also claimed that the bonus included settlement costs which would normally have been reimbursed by the Government if the the bonus had not been paid. GAO stated that the settlement costs were avoided as a result of the buyer's assumption of the existing loan; the payment of a bonus had no bearing on these costs. Since there was no legal authority under which to reimburse the employee for the real estate broker's bonus, the voucher could not be certified for payment.