Both housewarming and closing gifts are a great way to not only celebrate a new beginning for your clients, but to also build those relationships. By giving a thoughtful, personalized gift to homebuyers when they close on a home, your help to strengthen your influence and obtain referrals down the road for your real estate business. Keep reading to discover the best closing gifts from REALTORS®. Plus get advice on how much to spend on a real estate closing gifts with tips for choosing the perfect items. Do REALTORS® Give Closing Gifts?While buyers may not expect to receive a closing gift from their real estate agent, it’s normal for REALTORS® to give clients a token of their appreciation. Closing gifts from agents are considered a common courtesy within the industry. You can relay your appreciation with a real estate closing gift or housewarming gift. A solid way to thank loyal customers for their business, these simple gestures also help to end the buying or selling process on a bright note. Can REALTORS® Give Gifts to Clients? There is a common real estate rumor that agents aren’t allowed to legally give gifts to clients. Variations of this state that gifts over a $25 are prohibited. This is mostly inaccurate, although it does depend on the circumstance. Section 8 of the Real Estate Settlement Procedures Act (RESPA) states that “no person shall give and no person shall accept any fee, kickback, or thing of value pursuant to any agreement or understanding, oral or otherwise, that business incident to or a part of a real estate settlement service involving a federally related mortgage loan shall be referred to any person.” In short, this means that you can’t give a gift in return for a favor. Nor can you promise a gift as a result of a finalized service. However, if you are giving a gift as a thank you without any strings attached, this is okay. (You can read a more in-depth explanation of this and similar rules here.) Further, the $25 rule seems to originate from a basic IRS rule that clients cannot deduct more than $25 for gifts on their taxes. That’s not to say you can’t give a gift exceeding this amount. Simply put, if you give a gift that exceeds $25 you can only take the allowed tax deduction for that gift. Again, there are several exceptions to the $25 rule. These pertain to entertainment gifts as well as branded gifts that are considered promotional or advertising materials. (You can find more on this below.) Why You Should Give Clients a REALTOR® Closing GiftThere are a lot of great reasons to give a real estate closing gift to clients. Here’s why many agents engage in this practice:
How Much Should a REALTOR® Spend on a Closing Gift?As a rule of thumb, you should spend somewhere between 1-5% of your gross commission from a closing on a housewarming gift. When working with high-end clients, you may need to consider a higher quality gift rather than a run of the mill real estate closing gift basket to get the results you want. According to feedback from real estate professionals on Alignable, most agents give gifts in the $25-$100 price range. Ultimately however, how much you should spend on a closing gift depends on your budget. When things are tight financially, I like to refer back to the old adage that you have to spend money to make money. That said, giving a meaningful gift doesn’t have to cost a lot. It simply needs to represent your gratitude to the client. We find that giving personalized gifts is the best way to accomplish this. Tips for Choosing Real Estate Closing Gifts That Stand OutHere are some tips to help you choose the best client gifts.
Ideas for Real Estate Agent Closing GiftsNow that you know that housewarming gifts are a great way to nurture your client relationships and gain referrals, you may need help figuring out what REALTORS® give as closing gifts. Here are some great real estate closing gift ideas you can give to new homeowners to make sure you aren’t forgotten.
Are Real Estate Agent Closing Gifts Tax Deductible?The IRS has strict limits on the amount you can deduct for client gifts. In general, you can only $25 for gifts per recipient each calendar year. The exception to this is entertainment themed gifts, such as tickets. For this type of gift, you may deduct $50 per year for each client. There are some exceptions to this, however. Branded gifts with your business information can potentially be written off at 100%. This is because they are considered a promotional or advertising expense. However, we recommend that you check with a tax professional in your area or state for clarification before making any purchasing decisions. We hope our ideas for closing gifts from REALTORS® helps you pick the best products to say thank you. For more housewarming gift ideas, also be sure to check out information on our best closing gift, the Ulu Elite®, as well as our client holiday gift guide. Love what you see? Then make sure to subscribe to our newsletter for product updates and promotions. You can also follow Magnets USA® on Facebook and Instagram.
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