A federal agency that is supposed to encourage cost-cutting and competition in real estate transactions has issued a "Catch-22" ruling that effectively prevents home buyers from saving thoudands of dollars by hiring their our discount realtly brokers.

The Federal Housing Administration has decided that it will not allow home purchasers to use a cut-rate brokerage technique -- until the technique becomes "customary" in a particular market area.

Ironically, the very techinque FHA has rejected -- known as the buyer's broker plan -- has been recommended by officials at the Federal Trade Commission as a healthy alternative to the usual fixed-rate real estate brokerage patterns confronting consumers throughout the United States. e

In a buyer's-broker arrangement, a home purchaser hires a discount real estate agent to search and negotiate for a residence at the lowest possible price. The broker works exclusively for the buyer and is compensated exclusivley by the buyer -- much like an attorney, accountant or other professional retained by a consumer. The compensation of the buyer's broker can take the form of a fee based on time spent and services rendered, or can be a commission of 3 percent to 5 percent of the home price.

This is in contrast to the traditional relationship, where the home seller hires a broker who is compensated by a commission tacked on to the sales price of the house. The buyer in effect pays the broker's fee -- typically 6 percent to 7 percent of the home price -- but the broker is legally bound to reperesent the seller's interests throughout the transaction.

Buyer-brokerage has become common in the commercial and industrial real estate fields for years and is gaining footholds among home buyers and sellers in a handful of urban markets around the United States. The advantage of the techinque, according to proponents, is that it can not only lower costs to purchasers -- through effective negotiation of home prices and financing terms -- but can also reduce the total amount of commissions paid.

The most active buyer's broker in the Seattle area, for instance, adjusts his fees to clients so that they are always at least 1 to 2 percenatage points below what would be paid in a traditional transaction.

John L. Hale charges buyers a maximum of 5 percent of the price of the a home for representing them in all phases of the acquisition -- from contract terms through settlement. If a house he recommends to a client is already listed by another firm, Hale cuts his fee to 2 1/2 percent. The listing agent gets the same 3 percent to 3 1/2percent share he'd receive in any cooperative sales transaction with another brokerage firm.

The purchaser, however, ends up paying a lower total commission, no more than 6 percent. And, says, Hale, "The price the buyer is paying for the property is the lowest we've been able to get for him on the basis of our knowledge of the market and experience. The price in the usual transaction, on the other hand, is the highest the sales broker can get for his client, the seller."

Hale believes that buyer-brokering is one of the waves of the future for residential real estate, and he's supported in that belief by consumer groups, such as Consumers Union and the Seattle Consumer Action Network.

But he's also run into a major, unexpected roadblock: the FHA. The Seattle office of the agency issued a memo two months ago prohibiting buyer-broker commissions on amy home sales financed with FHA-insured mortgages. Buyer brokering is not "customary" in home real estate transactions, said Seattle-area office director E.J. Moger, and therefore FHA's national regulations won't allow it -- even if it does seem to offer the potential for cost cutting.

Essentially, said FHA's acting chief of single-family loan insurance, Philip Forest, "We go along with Seattle. If buyer-broker commissions aren't customary in the market there, then we canht allow buyers [using FHA] to pay them." Forest conceded in an interview that the buyer-brokering technique might help lower home prices "in some cases" and could certailnly save consumers cash on commissions. He also confirmed that FHA doesn't look at all at the amount of commissions charged to a seller by a realty broker -- "whether it's 8 percent or 12 percent we don't get involved" -- despite the fact that the commissions inevitably get tacked on to the price paid by the buyer.