Now that we are in November and inching closer to Christmas, the season of giving is in full swing. As a person who has gifts at the top of my love language, I couldn’t be happier about this time of year. There’s nothing I love more than shopping and picking out the perfect presents for the people I care about most. As a realtor however the concept of gift giving can get a little complicated. 

One of the many changes following the crash from 2008 is the tightening and attention given to RESPA. RESPA stands for Real Estate Settlement Procedures Act and isn’t new. In fact, it was signed into law in late 1974 and provides consumers with proper disclosures regarding settlement costs for closings and the transparency and elimination of referral fees and kickbacks. RESPA in this sense basically states that as a realtor I can’t reward a client or former client with “thing of value” for a referral. 


Attorney Scott Umstead breaks this down in the following examples:

What is forbidden: An agent can ask an existing client to refer other clients to the agent, but the agent cannot reward the referring client with a “thing of value” for the referral.  For example, promising the referring client a $500 gift certificate upon the closing of a referred client’s transaction is a clear RESPA violation. 

What is permitted: An agent comes to closing with a $500 gift certificate and presents it to his client as an expression of the agent’s appreciation for the client.  There are no strings attached.

What invites trouble: An agent has an ongoing relationship with a client.  The client influences his friends to use the agent.  The agent and the client have an unspoken understanding that the agent will reward the client in various ways (ex. discounted commission, gifts, etc.) and the client will use his (the client’s) influence to refer business to the agent. 


So, the good news is that as an agent I can give my clients a gift at closing, but does every realtor do this, why or why not? Does every client get a gift, why or why not? This is where the act of gift giving at a closing can also get tricky. Some people may say that giving closing gifts to buyers at the end of a transaction is one of the most hotly debated topics in the industry.

So why should realtors give a gift at closing, here are five reasons why, in no order: To help make the moment memorable, to show gratitude for your business, to help with the busy activities after closing like actually moving, to help furnish your new place, and to share how personable and special the process has become for both of us. 

Why should a realtor not give a gift at closing, here are five of those reasons, in no order: It puts a price on the client’s trust, it concludes the working relationship, it has become expected, it is a business/professional relationship and gifts don’t build relationships.

The most common argument I’ve seen for why some realtors don’t give closing gifts is that people do not get gifts from their doctor at their annual exams, or attorneys don’t provide gifts to clients at the end of a case, so neither should realtors. 

I don’t think it is a requirement to give gifts as part of the process of real estate transactions, but I love to celebrate getting to the finish line with clients and sharing in the special moment, because buying and selling a house really is a big deal regardless of if we are in the season of giving or not. 

Posted by Ariel Christy on
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