Many realtors believe closing gifts are an essential part of the real estate transaction process, especially if they want those clients to come back or make a recommendation. But exactly how big a gift should we buy for our new-found homeowners?
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Some experts are recommending buying more than a simple welcome mat and flowers. Indeed, more lavish gifts are actually becoming the norm on competitive, high-end listings, says a recent article on realtor.com.
As well, Redfin recently reported that luxury home sales actually fell for the first time in three years, which indicates that wealthy and foreign buyers are perhaps wary that prices have climbed too rapidly.
So what's too much for a gift? Here's one example in the article:
“When Christophe Choo helped a couple purchase a $15 million Los Angeles home, he wanted to buy them a closing gift that was equally impressive. So instead of leaving a bottle of Champagne in the fridge, he and his wife ushered them onto a chartered jet bound for Vegas.”
“Mr. Choo, a real-estate agent at Coldwell Banker Beverly Hills, said he spent about $30,000 to accompany his clients on an all-expense paid weekend in Las Vegas.”
Of course, such a closing gift is only possible in the luxury home market.
The article notes that although luxury real estate agents sell less properties in a year, the commissions they earn can be staggering – up to six percent of the final sales price on a single property.
As such, Choo believes it's more than worthwhile to splash out on a lavish closing gift. “My business is 70% repeat clients,” he says. “Creating memories is important.”
But not everyone agrees with Choo. Brian Buffini, founder of a Carlsbad, Calif.-based coaching company for real estate agents, told realtor.com that he doesn't believe agents should spend more than $50 on closing gifts. On the contrary, he reckons that less-pricey gifts can have the same, if not better, return on investment. For example, he says agents should just invite clients to their offices to pick out a pie.
“It’s kind of goofy, but people still like this stuff,” he said.