What to Give a Real Estate Agent After Closing: Beyond the Expected Handouts

After a home closing, one might wonder if it’s customary or appropriate to give a real estate agent a gift. The truth is, there is no formal obligation for you to present a birthday present or thank-you note. However, there are several reasons why giving them something extra-special could be appreciated.

The Agent's Role and Earnings

Real estate agents earn a percentage of the sale price, which is typically 6% in the USA. For a $100,000 home, that means the commission is $6,000. Their role in the transaction can be relatively minimal, especially if they have already found and met with potential buyers, spent little time in face-to-face meetings, and made minimal phone calls.

For example, in my recent property purchase, my realtor met with me for one 10-minute meeting, filled out a few forms, and made about three phone calls to the seller’s agent, taking under two hours in total. Her brokerage will receive 3% and the seller’s brokerage will receive 3%. Since my realtor owns her agency, she gets the full 3%. For smaller agencies or less successful agents, the commission rate might be about 0.7%, which still amounts to $700 for a $100,000 sale. This is a relatively low amount of work, which makes a thoughtful gift or gesture all the more fitting.

The 'Feast or Famine' Reality

The job of a real estate agent can be “feast or famine,” meaning they spend most of their time actively searching for buyers and sellers, often working tirelessly without immediate success. They might have weeks without a single sale, yet make a few significant deals in a single day.

Considering this is their main source of income, it's essential to recognize their hard work and dedication. A well-thought-out gesture can go a long way.

Beyond a Thank-You Note: Referrals as Gifts

The real estate agent's ultimate goal is to gain referrals from satisfied clients. After closing, they could be very receptive to any leads or introductions to other potential buyers or sellers. These introductions can be invaluable and significantly boost their income.

A referral is often considered the best gift a client can give to an agent, even more so than a tangible gift. If your agent is part of a smaller brokerage with lower-than-average commission rates, a referral could be a game-changer for them.

Conclusion

While there is no formal requirement to give a real estate agent a gift after a home closing, doing so can show your appreciation for their hard work and dedication. A gesture like a referral or a thoughtful gift can be particularly meaningful. Remember, in the world of real estate, the true ‘sale’ often happens after the closing, as far as the agent's efforts are concerned.