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Closing Gifts?

By
Real Estate Agent with Keller Williams Capital Properties DC AB15253

I just read an article by Prospects Plus about the pros and cons of closing gifts.  As they pointed out, the real estate industry is one of the few (or only?) industries that give closing gifts.  It made me wonder who does give closing gifts here in the rain and what your "success" rate is.  >Here are some of the pros and cons of giving closing gifts as seen by Prospects Plus. 

Pros 

According to the IRS agents can deduct up to $25 for each person they gift during the year. That doesn't buy much of a gift - and at that level, it sounds like it will only buy you something that ends up in the junk drawer.  We all probably know that you should put your branding on the closing gift.  With your branding on it, you’ll be able to deduct it as a marketing expense and possibly get a larger deduction. Talk to your tax professional.

Prospects Plus suggests giving clients the keys to their new home on a quality (meaning, not plastic) keychain. With your branding on it, it may qualify as a marketing expense and possibly get you a larger deduction.

Talk to your tax professional.  

I just came back from the Keller Williams Family Reunion, where the vendor hall was filled with lots of companies selling closing gifts.  There is always the basket company selling gift packages for that first night in a new home - pasta, a strainer and a bottle of wine - or the company selling the branded cheese boards and bottle openers.  That one seemed to have more staying power than the basket that lasts for a few days and is gone.  

Do you do an annual client appreciation event?  The benefit of a client appreciation event is that it gives you lots of touches - the invitation, the follow up texts, the calls to confirm, the event itself and then the pictures on social media and shared with clients.  The annual client appreciation event may give you a bigger tax deduction - depending on how you structure it - and will keep you top of mind because of all the lead up and follow up touches.  Most agents feel that it isn't the event itself but rather the surrounding touches that make the difference. 

Cons

It is hard to imagine what gift is going to be used frequently so that you stay top of mind.  I can imagine a branded coffee mug with my face on it gathering dust at the back of the cupboard.  UGH!

Since referrals are so important to all of us, it has to be a great gift - and really useful or notable - to make us memorable throughout the years.  I remember an agent who gave a bright red Weber kettle grill to her clients. 

Two problems: 1. It exceeds the IRS restriction - unless she found some way to engrave it or label it to make it marketing rather than a gift.  2. Not every client buys a home with room for a grill - and even when they do, they may not be into grilling.  I recently had clients who were looking at townhomes and when I saw a home with a deck off the kitchen, I would say - You can grill here!  Turns out they were vegetarian and didn't grill - at all. 

Instead, Prospects Plus argues in favor of continual touches through post cards and calls.   I think it is probably a combination of marketing gifts at closing - and lots of touches after closing.  What do you think?  Do you gift at closing - and if so - what? 

Comments (25)

Hannah Williams
HomeStarr Realty - Philadelphia, PA
Expertise NE Philadelphia & Bucks 215-820-3376

Lise Howe  I really never know what to give the few times I did they complained 

Mar 01, 2024 02:20 PM
Dorie Dillard Austin TX
Coldwell Banker Realty ~ 512.750.6899 - Austin, TX
NW Austin ~ Canyon Creek and Spicewood/Balcones

Good evening Lise,

I do believe like Bill mentioned it is a catch-22! I don't go by the $25 limit..you can't buy anything for that amount so i get them something special and it comes from the heart not a write off!

Mar 01, 2024 04:47 PM
Kathy Streib
Cypress, TX
Home Stager/Redesign

HI Lise- Over the years i think we've received one closing gift from an agent whose services we used several times. The gift was one I kept for many years and always thought of her when I looked at it. I agree with Liz and Bill Spear that if after having worked with them and found them their future home you still haven't established a relationship, then a closing gift isn't going to do the job. 

Keeping in touch with your clients and surprising them with unexpected gestures is even better. 

Mar 01, 2024 05:29 PM
Lise Howe
Keller Williams Capital Properties - Washington, DC
Assoc. Broker in DC, MD, VA and attorney in DC

Roy Kelley The best part to me of Village Settlements is that wall of candy!  I love going there just for that - and of course for the closings.   I never got a gift from them.  Now I use Universal Title. 

Mar 01, 2024 08:04 PM
Lise Howe
Keller Williams Capital Properties - Washington, DC
Assoc. Broker in DC, MD, VA and attorney in DC

Kathy Streib - I agree - and I like getting coffee or lunch with clients.  I just had lunch before I went to Las vegas last week at Mon Ami Gabi with a past client.  She seems to like me - and we have lunch probably twice a year - not bad for someone who only sold an investment property for her.  I am having wine with someone else next week - 

Mar 01, 2024 08:06 PM
Endre Barath, Jr.
Berkshire Hathaway HomeServices California Properties - Beverly Hills, CA
Realtor - Los Angeles Home Sales 310.486.1002

Loved your post  Lise Howe  I just met with my accountant the other day and he educated me on the $25 rule.... my previous accountant never told me... now with that said it is not a gift it is Marketing Money for future business:))Endre

Mar 01, 2024 10:31 PM
Brian England
Ambrose Realty Management LLC - Gilbert, AZ
MBA, GRI, REALTOR® Real Estate in East Valley AZ

I have done different things with closing gifts over the years and often times I will give something that also has my business information on it so that I can claim it as a marketing piece rather than a gift, haha.

Mar 02, 2024 04:45 AM
Carol Williams
Although I'm retired, I love sharing my knowledge and learning from other real estate industry professionals. - Wenatchee, WA
Retired Agent / Broker / Prop. Mgr, Wenatchee, WA

Hi Lise,
I was never in the habit of giving gifts. I did if there was something special I knew the clients would particularly like or use. I remember one time I gave 2 blueberry bushes to some buyers who loved to grow things. My brother has a blueberry farm and nursery, so it was special in a couple of ways.

Mar 02, 2024 05:57 AM
Greg Brown, Sales Rep Toronto, Durham region
Sutton Group Heritage Reallty Inc., Brokerage - Whitby, ON
www.GregBrown.Realtor

I like taking my clients out for a nice dinner with me and my wife to strengthen the relationship and possibly receive future referrals. Canada CRA (Canadian Revenue Associations) Allows 50% of dinner with your client to be used as a tax deduction, yet a gift card is 100% tax deductible. So I buy a gift card from the restaurant we are going to and pay with that, and now its 100% tax deduction.

Mar 02, 2024 03:49 PM
Laura Cerrano
Feng Shui Manhattan Long Island - Locust Valley, NY
Certified Feng Shui Expert, Speaker & Researcher
There’s it nice thing that can be done that with gift giving as you can really tap into to the person’s soul. Real estate is no different in as much as that.
Mar 02, 2024 10:44 PM
Sam Shueh
(408) 425-1601 - San Jose, CA
mba, cdpe, reopro, pe

 IRS agents can deduct up to $25 for each person they gift during the year.

Coffee grande gift card ?  LOL

Mar 03, 2024 08:26 AM
Leanne Smith
Dirt Road Real Estate - Golden Valley, AZ
The Grit and Gratitude Agent

I am fortunate as my husband turns pens for me. The mechanics are purchased and cost around $15.00. The wood is usually free or costs very little. I attempt to match the pen to the client's interests. I just gave one to a client with a western theme.

Mar 03, 2024 09:24 AM
John Juarez

You are blessed! I am sure your husband loves the challenge of preparing such thoughtful gifts for you to give to your clients.

Mar 06, 2024 05:36 PM
John Pusa
Glendale, CA

Hello Lise Howe very good good educational topic on closing gifts.

Mar 03, 2024 10:07 AM
Joyce Marsh
Joyce Marsh Real Estate LLC - Daytona Beach, FL
Joyce Marsh Homes

For me, it’s such a personal decision based on the relationship I have with either the buyer or seller.  It really depends.

Mar 03, 2024 11:06 AM
Sam Shueh
(408) 425-1601 - San Jose, CA
mba, cdpe, reopro, pe

Often I gave my own oil paintings as appreciation to closed deals.  Many display them in their new home.  Thanks for posting this topic.

Mar 04, 2024 06:21 AM
Toby Barnett
KW North Sound - Marysville, WA
Toby Barnett

I do home warranties at closing for gifts as they're really practical. Through out the year, I write personal cards, send calendars, and a few other things. Some days, it feels like you're paying for business yet it is all advertising to stay top of mind which is not different than any other brand.

Mar 04, 2024 10:04 AM
Adam Feinberg
Elegran - Manhattan, NY
NYC Condo, Co-op, and Townhouse Advisor

Most clients will be relational, and occasionally I will get one that is transactional.  In those cases the closing gift may be generic. But- for those clients that I really get to know- I try to make the gift that is specific for that client. The most unique gift I gave was a historic picture printed on glass and framed of an amusement park that closed more than 100 years ago that was in the neighborhood of where the client bought.  It was too expensive to deduct, but well worth it and just overall very cool.

Mar 04, 2024 11:25 AM
John Juarez
The Medford Real Estate Team - Fremont, CA
ePRO, SRES, GRI, PMN

I have simplified my life by giving gift cards to my clients. Maybe to a restaurant in their new city or neighborhood. Maybe to Home Depot or Lowes so they can find tools or material for working on the house. Maybe a Visa or Mastercard so they can spend it where they wish.

I write off $25 for each person and give thanks that they chose to work with me.

Mar 06, 2024 05:42 PM
Michael J. Perry
KW Elite - Lancaster, PA
Lancaster, PA Relo Specialist

It depends if you show love by giving gifts to people ( the 5 ways people demonstrate love) . I still think it should be a House Warming Gift you take to the house in the first 15 days after Settlement. This demonstrates an ONGOING Relationship ( post Settlement) !!!

Mar 09, 2024 05:12 PM
Nina Hollander, Broker
Coldwell Banker Realty - Charlotte, NC
Your Greater Charlotte Realtor

Good morning, Lise... I gift watercolors of my clients' homes or personalized door wreaths that a former client makes for me. They cost somewhat more than the $25 deductible, but that's okay. What I gift them is memorable and my clients love the gifts. However, I don't use them as closing gifts... I use them as housewarming gifts.

Mar 13, 2024 04:29 AM