Allen.. I think it just depends on the client.. I've given gift certificates for restaurants, baby sitters.... heck I've been the baby sitter, Home Depot, bought paintings.. when we had a local artist who did watercolors of each city.. I would buy one of the cities where the client bought, I've made baby blankets and cross stitch pictures when a client saw me doing one for a friend and wanted one... Every client is different and every closing gift should show that..

Allen - A bunch of great ideas... I always seem to gravitate towards a certificate to one our finer restaurants... for one client I went on a binge and got them all sorts of certificates to some downtown Naperville shops... she later told me that she had a full day of fun shopping.

Miss Ellie allowed you to go to Nordstroms with her?

Thanks for this post. I was wondering what i can and cant do here in new jersey as far as giving gifts to a referral source. Informative as usual.

Thanks again, 

Dave

Thanks for the great ideas.  I've only been in the business 6 months but I saw my fist referral last week and have been wondering what to do for them.  Thanks!

Great ideas, thank you! I have to agree that 50$ doesen't do it any more,

Great post! Definitely a must-do for anyone hoping to grow their business to more referral-based, rather than sweat-based. Work smarter, not harder, right?

Ode to the grey area of referral compensation for commission, or more accurately because they want the ones they care about to be treated the same way they were!  And God forbid you show tangible compensation.  Dynamic blog with a hint of 'outside the box' flavor to common business ethics.  The nature of things seem to lay in a pool that lacks consistency....."It's like Coca Cola or any non-real estate company being told that it cannot run promotions, giveaways, etc"....very decent analogy Allen. 

So far as I know if the gift isn't tied in a direct way to a real estate commission (such as a specific percentage, especially round numbers which are easy to evidence as a commission referral) there is an $11,000 per year personal gift exemption for anyone in this country to anyone else.  If they really made your year, that can be applied from one person to the referring friend, again to their spouse, and then again by the referral receiving agent's spouse to the referring friend and to their spouse.  Between two couples that means up to $44,000 per year exempt from tax.  Remember that a gift such as this is an after tax gift, so if you are at a 50% marginal tax rate, what would have been a 25% referral before tax is only now a 12.5% referral after tax.  I'll repeat, though, don't make a "gift" tie to the commission in a direct percentage way!

There are some really great ideas for gifts,  I like to give gifts and the 50 dollar thing is a real limitation.  I consider myself generouse and would like to give more like 500 for a couple.  I also sell in a place where the median price is 550K so it seems stingy to give 50 buck out of a 15K dollar check.  The saying is the more you give the more you get.

Orville McCallister

Most people like to see their friends succeed and often a gift is not necessary although always appreciated.

I have peopple who send me business and have the same experience. SOmetime spending time with them, a dinner together, a show etc...something they like and you like to do together. If they are that giving, it is about the relationship to them. THe best gift is the gift of your time and your contribution to the relationship.

Thanks for a great post.

There are some really great ideas here.  I have to agree with John about the relationship being the most important thing to many people.  Several of our friends have referred clients to us, and they wanted nothing in return.  We always send thank you noted, and then usually take them out to dinner.  They just want us to succeed, and love helping.

I agree with some of the more recent responses.  It has nothing to do with the dollar amount; it's about giving something back that is appropriate for that person and your relationship.  It's simply recognizing the person for contributing to your success.  Sometimes a thank you note is all it takes.  Sometimes it's a dinner at the finest restaurant around or dog-sitting for a week.  Don't get hung up on the "right" amount.

AnthonyClarkRealtor.com

Cost of a personal chef in my area runs about $300 for a weeks' worth of meals, FYI.  Definitely, the relationship is the most important thing-but we can probably all agree that an unexpected gift to someone who helps you grow your business is smart and kind and indicative of the fact that you appreciate their work on your behalf.

Good post.  Gifts are tricky.  Truth is, most people who give referals don't expect much beyond a meaningful thank you.  But, it is definitely wise to accompany that with something more tangible.  One thing that I think everyone loves is a free night out---gift certificates to a nice restaraunt (enough so they can order a nice wine and desert too) and movie passes with the free candy and drink, etc., and babysitting (if appropriate).  People really seem to respond to that.   

In the past, we have donated money to a charity in a person's name to say thanks for the referral. We usually let them pick their favorite one.  The referral person knows we are acknowledging them, but we don't have to worry about gifting a non-licensed person. 

Allen ...good post.

Dave.... NJ is tough with the laws. I think many years ago, they dropped it down to like $15 as a gift?   but in all honesty, it's a judgment call that you can make on your own. Just don't mention it...  basically, I am not telling anyone anything. It's a business decision.....  are you buying business?  Not in this case, you want to honestly show your appreciation.

Allen,

This is Brandi from Anchorage and I appreciate everyone's help on my original post and on this one!  I'm not cheap or stingy by any means so this year one of my goals is to absolutely reward my referrals just based on the fact they give me a referral this year.  You know, come to think of it, I've never been asked to cut my commission by a referral client. I never really thought of that till know.  Maybe my friends and family give me such good praise that my referred clients feel no need to doubt my abilities and cut my commission (a little bragging going on here). 

Another idea I had was to once a year gather all my friends and family that referred me a client that year, start with a pre-dinner cocktail party at my home, then rent a large limo and take them to this fancy restaurant called Double Musky at our ski Resort 45 minutes out of town.  It's one of those restaurants that most people save for anniversaries, birthday's, etc. because of the price tag.  Just a thought!

This is one issue loan officers always face as well.  The ideas you mention I really like...especially the oil painting of the new home!   Showing appreciation, I believe comes down to what you feel is the right decision.

Great ideas everyone. I like the idea of a personal chef, my wife would love it. I guess she better refer someone to me then....

As a home builder, we have a lot less rigidity in laws on how we can thank someone.  Some things we've tried for insurance agents and mortgage agents that have helped us:

Donation to Habitat in their name

Letting them put their signs on all our specs for a month

We've paid their membership to the local Home Builders Association for a year

We've sent letters to their prospect lists recommending them

We very, very, almost never and seldom give cash or write a check to the person.  First, the amount then becomes the only memory, when the above list actually can gain them much more for themselves.  Second, we stay out of the arena of possibly violating real estate agency laws.

I would guess talk it over with the friend and first off let them know how much you appreciate there help. Pay for there home lawn service or something else tangible ( direct to the vendor of course ) or in any way help them out to show you really appreciate there help as well. And of course as mentioned before none of this tied directly to a commision or other attachment to sales. You know like if they where doing home improvements a few hundred dollars of home improvement gift cards or something like that could show up.

You know think outside the box but talk to them first. As mentioned they might just want to help you so don't offend them in anyway.

Allen,

Thanks for another great post. I like these ideas, not the ordinary, helps to convey exceptional appreciation!

Great Ideas - wish we could use them here in Colorado! Anything that "smacks" of a referral fee to an unlicensed person is frowned upon by RESPA. (Well...actually more than frowned upon - it involves large fines etc...) but I sure wish we could....it would make things so much nicer!

Some great ideas here, Allen. Good to see you posting here. I've bookmarked this and your other post for reading again in the future (and of course implementing these ideas).

Jeff

I acknowledge each and every referral I am given.  It is a token of my appreciation, not it's value.  I have several referral partners who send me 10,000+ in business each year.  I send them a scratch ticket, or movie tickets.  Nothing more than a few dollars in value.  Occasionally, I'll send or take them to a Red Sox game, but generally, I go with them, so we can deepen our relationship.

If the value of the "thank you" is too high, I begin to quesiion the motivation of the referrer, and besides I prefer to "thank" them for the referral whether or not it closes and I get paid.

Allan,

One useful method I've been promoting is to cater a dinner for a good friend and four of his friends, After enjoying the dinner together, they are more receptive to listen to a sales presentation.

Michael Lozar