Can real estate agents give gifts to clients?

The federal rule agents worry about is Section 8 of RESPA, the Real Estate Settlement Procedures Act. The Consumer Financial Protection Bureau answers the question in its RESPA FAQs: Section 8 "does not prohibit a lender or other settlement service provider from giving a consumer a gift or an incentive" for doing business with that provider. An agent is one of those providers, and your client is the consumer.

The same answer names what is prohibited: "giving an incentive to a consumer in exchange for the consumer referring other business" to the provider. A thank-you for a closed deal is the first thing. A gift offered for sending a friend your way is the second.

Price does not move a gift from one side to the other. The CFPB says there is "no exception to RESPA Section 8 solely based on the value of the gift or promotion", so a small reward for a referral is still a reward for a referral. What matters is what the gift is for, not what it cost.

The $25 figure agents pass around is a tax number. The IRS caps the deduction for a business gift at $25 per recipient per year, which limits what you write off, not what you give. Our guide to whether closing gifts are tax deductible covers it.

Every state licenses agents under its own rules, and they vary. Where they restrict anything, it is usually two things: cash rebates, and gifts promised in advance as an inducement or made conditional on the deal. "List with me and get a free gift" is the pattern those rules describe. An unpromised thank-you is a different thing.

The details differ, down to how a state treats gift cards, when a gift is handed over and what has to be disclosed. Read your state real estate commission's rules on inducements and rebates, and ask your broker, whose policy may be stricter than the state's. This page is not legal advice.

Cash back to a client is a rebate, whatever you call it, and some states ban rebates outright. Some state rules group gift cards with cash. A gift card handed over at the table can look a lot like money back from the commission.

A physical gift does not have that problem. It is hard to mistake a plant, a cutting board or a framed picture for a rebate. If a gift card is what you want to give, that is the one to check with your broker first.

Put the federal answer and the state rules together and the cautious closing gift has four features.

Unpromised

Nothing about the gift comes up before or during the deal. Offer it to win a listing or a buyer, in an ad or across a kitchen table, and it becomes an inducement.

No conditions

It was never a term of the contract and nothing depended on it.

Your own client

It goes to the person you represented, as thanks for their business. A gift to whoever sent you that client is the case Section 8 is about.

Not cash

An object, a meal, something for the house. Not money, and not a card that spends like money.

Yes. Most agents give something. It is a custom, not a requirement: no rule says you must, and a client who has bought before will notice if it is missing.

Buyers are the usual recipient, since there is a new house to give something for; our guide to closing gifts for buyers has the ideas. Fewer agents give to sellers. Most gifts land between $50 and $150, and our guide on how much to spend on closing gifts shows where that range comes from.

If you are a buyer or seller wondering what to expect: probably something modest, at closing or soon after. Nothing is owed either way.

Ask your broker before you accept. The rules above are not written about this: they are aimed at referral payments and inducements, not at a bottle of wine from a happy buyer.

Brokerage policies differ on what an agent may keep, and cash or a gift card is the case to raise. If you are the client, our guide to gifts for your realtor has ideas, and a review means more than any object.