PCS - Real Estate

When eligible employees relocate, the government assists in paying some of the costs associated with selling a home in the old duty location and purchasing a home in the new location. The entitlement will be documented on the employee's travel order. Settlement for the sale, purchase, or lease termination transactions should be not later than 1 year after the employee's transfer effective date.

Reimbursement for real estate expenses is based on a determination of what is customary at the location of the sale and/or the purchase. Since reimbursement is dependent on this determination, it is critical that employees who wish to be reimbursed clearly understand what charges are customary for either the buyer or the seller when and where the transactions take place. Employees should not agree to pay in full charges for transactions in localities where the charges would customarily be split between the two parties. Additionally, employees should not agree to pay charges customarily paid in full by the other party at that location.

Reimbursable costs may include broker's fees or real estate commissions for the sale but not the purchase of a residence, certain advertising and selling expenses, and certain legal and related costs. There are also a variety of miscellaneous expenses associated with the sale or purchase of a residence that may be reimbursed. Some examples are FHA or VA loan application, loan origination fees, cost of preparing credit reports, mortgage and transfer taxes, state revenue stamps and mortgage title insurance policies when required by the lender.

Certain costs are not reimbursable. For example, types of insurance purchased for the protection of the employee such as owner's title insurance policies, property taxes, interest on loans, points and mortgage discounts, and VA funding fees cannot be reimbursed. Finally, there are some costs which realtors may consider customary but which the government will not reimburse in any case. For example, express mail charges such as UPS or Federal Express occur in most real estate transactions, however, they are not reimbursable.

While claim forms and other information on real estate entitlements can be obtained from the CPAC, the local Staff Judge Advocate is generally the reviewing authority on "customary practice" issues. Employees are encouraged to seek advice and assistance on these matters at the time of the sale or purchase.

Content last reviewed: 11/14/2016-GLB

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