How much should a realtor spend on a closing gift?

Ask how much realtors spend on closing gifts and the answer is that most land between $50 and $150. Under $50 starts to look like an afterthought on a six-figure purchase. Over $250 rarely buys more gratitude, and past a point it makes the client wonder what the gift is for.

If you want one number, budget about 1% of your gross commission on the deal, then round to something that buys a good version of one thing rather than a mediocre version of three. On a typical mid-market sale that is $80 to $150. On a starter condo it might be $50. On a luxury listing it can climb, but not in a straight line. More on that below.

The bigger lever is not the dollar figure. It is whether the gift is still in their house a year from now. A $60 gift they hang beats a $200 gift they eat, drink or regift.

The advice you will see repeated most is to spend 1% to 3% of your commission on the closing gift. It is a decent starting point because it scales: a $250,000 sale and a $1,500,000 sale should not get the same gift.

Here is the math on a $400,000 home with a 2.5% buyer-side commission. Gross commission is $10,000. One percent is $100. Three percent is $300. Run the same rate on a $250,000 home and the range is $63 to $188. On a $1,000,000 home it is $250 to $750.

The rule has four problems, and you will hit at least one of them on every deal.

• Gross or net? After a 70/30 split, that $10,000 is $7,000 in your pocket, and 1% of it is $70. Pick which number you mean and stick to it.
• It breaks at the top. On a $3,000,000 sale, 3% of the commission is $2,250. Very few gifts at that price feel right coming from an agent, and some clients read them as a rebate. High-end clients notice thought before they notice price.
• It breaks at the bottom. On a $150,000 sale you may net $3,000 or less, and 1% of that is $30, which buys almost nothing. Give a good $50 gift and stop doing the math.
• It ignores the relationship. A client on their third deal with you has earned more than the percentage says.

Numbers are abstract until you know what they buy. Here is the same budget at three levels, with the trade-off at each.

$50

A bottle of wine and a card, a plant, a good doormat, a small gift basket, or a $50 gift card to a restaurant near the new house. All of it is gone within a month, which is fine, but the card is the only thing they keep. Gift cards in particular read as a small rebate rather than a gift.

$100

The options open up: an engraved cutting board, a mid-size gift basket delivered, a smart doorbell, a framed portrait of the home. Cutting boards get used, which is a real point in their favor, but engraving the address dates the board the day they move. With a delivered basket, roughly a third of your $100 is packaging and shipping, not gift.

$250

A large basket, a case of wine, a high-end kitchen item, a house-cleaning service, or a bigger custom piece. The risk here is different: the more you spend, the more likely you buy something they would have chosen differently themselves. Spend the extra on the card and the delivery instead, and keep the gift itself in the $100 to $150 range.

Do real estate agents give gifts to buyers? Almost always. Buyers are the default recipient: they are moving into a place, and nearly every closing gift idea assumes there is a new house to fill. Give it at closing or in the first week, once they have keys and a bare wall.

Sellers are the harder case, and more agents skip them. A seller just paid the commission, so a gift can feel odd, or it can feel exactly right: they gave up a home, often one they lived in for years. Spend a little less than you would on a buyer if you like, but do not skip it. A gift that honors the house they are leaving, made from the listing photo you already shot and framed, lands harder than a basket sent to a new address they have not settled into.

If you represented both sides, one gift each. Do not try to split one gift across two households. And if the seller is also your buyer on the next place, one gift for the new home covers it, with a card that mentions both.

No. There is no rule, most brokerages have no requirement, and no client will fire you over it. It is a custom, not an obligation. It is a common custom, though, so a client who has bought before will notice if it is missing.

Agents do it anyway because the transaction is over and the referral relationship is just starting. The closing gift is the last thing you do with a client, and it is often the only physical thing of yours in their home. Most agents earn most of their business from repeat clients and referrals, so a $100 gift is a line item against future deals, not a thank-you note.

The etiquette is short.

• Give it in person if you can, at closing or when you hand over the keys. Mailed is fine if you follow up with a call.
• Write the card by hand, always. The card carries the sentiment. The gift carries the card. Our guide to the closing gift note has wording to copy.
• Leave your logo off it. A branded gift is marketing they have to display. Your name goes in the card, and they will remember who sent it.
• If the sale was hard, an estate, a divorce, a short sale, scale it down and keep it quiet. A plant and a note beats a celebration basket.

The reverse question, gift for real estate agent etiquette from the client's side, has a shorter answer: nothing is expected, and a review and a referral beat any object. Our guide to gifts for your realtor covers that side of the table.

You can deduct business gifts, but only up to $25 per recipient per year. That is IRS Publication 463, and the number has not moved since 1962, which is why it feels so low. Spend $150 on a buyer's gift and $25 of it is deductible as a gift. The rest is not. Our guide to whether closing gifts are tax deductible has the detail.

A few details worth knowing before you file, none of them tax advice:

• Incidental costs do not count toward the $25. Wrapping, packaging and shipping are excluded as long as they do not add real value to the gift itself.
• Items that cost $4 or less and carry your name are exempt from the limit. A branded $100 basket is not a $4 item, so calling it advertising is a stretch. Ask your accountant before you reclassify a gift as marketing.
• A couple who bought together does not automatically make two recipients. The IRS generally treats a gift to a client's spouse as a gift to the client. Ask before you assume $50.
• A closing gift is a thank-you to a client, not payment for a referral. Keep those two things apart in your books and in your head. Whether agents can give closing gifts covers the rules.