GSA issues update to rules governing relocation expense reimbursement following real estate lawsuit

The General Services Administration is set to institute a new tweak to the rules governing how agencies may reimburse federal workers for expenses associated with relocating for their work.

Last May, the National Association of Realtors settled multiple lawsuits brought by home sellers alleging that the longstanding practice where a seller bears sole responsibility for agents’ commissions, which the buying and selling agents then split, violates antitrust rules and artificially inflates those commissions. The trade group agreed to pay $418 million to settle the suits, in addition to doing away with shared commissions moving forward.

As of Aug. 17, home buyers must negotiate a contract—and associated commission—for their real estate agent at the outset of the home finding and buying process. While home sellers may continue to opt to pay the buyer’s agent commission, the topic is now up for negotiation between the parties.

In a filing slated for publication in the Federal Register Wednesday, the General Services Administration announced a new tweak to its Federal Travel Regulation governing reimbursements associated with the purchase or sale of a home as part of a federal employee’s relocation for work. Prior to the change, GSA regulations prohibited reimbursement of fees or commission paid in connection with the purchase of a home at the employee’s new duty station.

“As a result of changes to the residential real estate industry that went into effect on August 17, 2024, homebuyers now sign an agreement with their agent specifying the amount or rate of compensation the agent will receive, or how this amount will be determined,” GSA wrote. “While sellers and their agents can still offer to pay a buyer’s agent fee/commission, that exchange must be separately bargained for. This means that in some transactions, homebuyers will be required to pay the full buyer’s agent fee/commission.”

To accommodate this shift in how the costs of a home transaction are borne, GSA said it is “temporarily” waiving the prohibition on reimbursing federal workers for their buying agent’s commission for a home purchase following their relocation, retroactive to Aug. 17.

“This notification is effective upon the date of signature and retroactively applies to buyer broker fees/real estate commissions incurred by an employee on and after August 17, 2024, in connection with the purchase of a residence at the new official station incident to their relocation,” GSA wrote. “This bulletin will remain in effect until explicitly canceled or superseded.”