Closing gifts are almost as important in the real estate world as securing a home, at least it is if you want your clients to come back.
Are you thinking about buying a simple welcome mat and flowers for the family’s new home? You better think again. And a lot bigger.
Plus, the lavishness of the gift only intensifies as competition for high-end listings heats up, an article in realtor.com said.
And on top of that, Redfin recently reported the luxury housing market witnessed its first drop in home prices in three years, possibly indicating that wealthy buyers and foreign investors are stepping out due to volatility in the global markets and fears that prices have climbed too high, too quickly.
But what is too much for a gift?
Here’s one example the article gives.
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.
It’s important to note that the luxury real-estate market is on a level of its own.
According to the article, while luxury real-estate agents generally sell fewer properties per year than their mid-market colleagues, some top-shelf agents can earn six-figure commissions, or as much as 6% of the final sale price, from a single purchase.
In the article, Choo explained that the over-the-top closing gift strategy, which includes giving the most lavish gifts to clients who spend over $10 million, pays off. “My business is 70% repeat clients,” he said in the article. “Creating memories is important.”
However, not everyone agrees with this method.
The article added that Brian Buffini, founder of a Carlsbad, Calif.-based coaching company for real estate agents, discourages agents from spending over $50 on closing gifts.
Instead, Buffini said less-expensive gifts can have the same return on investment.
So maybe ditch the private jet to Vegas and try spending you resources to check in. In the article, Buffini suggested inviting former clients to come and pick out a pie from their offices for the holidays. “It’s kind of goofy, but people still like this stuff,” he said.