What to "tip" your agent/lender?

April 18, 2007 8:25 AM

We just bough our first home and need advice on ways to thank those that helped us get through the process smoothly.

My wife and I just closed on our first home. The entire process took us just over 6 months because we looked at about 70 homes before we found “the” one. This being our fist time through the home buying gauntlet we don’t know if we are supposed to give a little more than a thank you and a hand shake to those that helped us.

The person (lender) helping us with the mortgage and most of the closing aspects is a good friend. She has helped us through out the process and really helped us deal with most of the questions we had so we bought her a day at the spa (roughly $200). Although we don’t have any experiences to compare the agent with we feel that he did a great job.

Both the agent and lender are getting paid through normal real estate fees. The lender gave us a great deal because of our relationship. The agent is getting his usual 3%.

My question is this. Is it normal to “tip” your lenders and agents outside of their normal fees? If so, what is the normal tipping amount? Is the gift (spa) we got for the lender enough of a thank you? Should we get the agent a similar gift? Or should we just say thank you, shake hands and move one with our lives?

My wife and I think the spa is a great gift, however, we don’t want to offend anyone. At the same time we just bought a house so we don’t exactly have a lot of tipping money left.

Any opinion is greatly appreciated!

posted by birdlips to home & garden (17 comments total)

It's nice that you gave a thank-you to your mortgage broker friend, but in general, it is traditional for the agent to give you a gift. Still, your agent will appreciate a glowing letter of recommendation/thanks.
posted by Mister_A at 8:32 AM on April 18, 2007

My wife, as a Realtor, tends to build a real relationship with the clients, so she feels compelled to buy them a gift, particularly if it's their first home. I don't think she's ever gotten a "tip" from the client.
posted by thanotopsis at 8:33 AM on April 18, 2007

Tips/gifts are not expected by these folks. They have been paid.
posted by poppo at 8:36 AM on April 18, 2007

Don't tip the agents. Seriously. If anything, the agent who represented you might send you a check for like $100 or a housewarming gift thanking you for your patronage.

I wouldn't have tipped the lender either. But since they are a close friend of yours, do whatever you're comfortable with. $200 is more than generous and plenty.
posted by jerseygirl at 8:36 AM on April 18, 2007

A sincere note of thanks should suffice. They were, after all, just doing their jobs and got paid for doing it.
posted by Thorzdad at 8:37 AM on April 18, 2007

If you really think that they did a good job, your best "tip" to them is to refer other business to them.

You were considering tipping the other agent? Really? Considering that that person's interests were more or less the exact opposite of yours, you might want to reconsider how grateful you are for his or her services. Most people aren't even that happy with their own agent, let alone the other side's. Make sure that you are objectively evaluating these service providers, not just caught up in the (fantastically satisfying) giddiness of buying your first home.

No offense intended, but you might also reconsider how happy you were with your friend the lender's services if you saw how much money that person is making off of you and how competitive the market for those services is.
posted by jcwagner at 8:48 AM on April 18, 2007

With the market slowing and prices softening the best gift you can give your lender and agent is to sing their praises to everyone you know. If they went above and beyond, tell people. Write them up in yelp.com if it covers such people. Write them thank you notes and inform them you'd be delighted to be a reference.

Successful people in both of those businesses are successful largely because of word of mouth and repeat customers. The best thing you can do for either is to help them grow their business. The best thing you can do for the rest of us, if they really were good, is to let us all know so we can use them rather than the plethora of losers who have been riding the housing wave the last five years.
posted by phearlez at 8:49 AM on April 18, 2007

Again, referrals are lenders and RE agents bread and butter...just pass along their names and business cards. Even if they only ever get one deal because of your word-of-mouth, they'll make plenty of cash.

Although, there is never anything wrong with a sincere thank you note, if you feel you truly need to say it.
posted by Asherah at 9:01 AM on April 18, 2007

I don't think a gift is necessary or really appropriate, and I don't understand why people feel compelled to buy them. You are the client; all of the people in question are making a nice amount of money from your business.

It's always gratifying to hear that your work is appreciated, though; I think a sincere note (and a mention that you plan to recommend them) is all that's needed here.
posted by boomchicka at 9:09 AM on April 18, 2007

Please don't tip. It sets a dangerous precident.

If no one had every started tipping waiters in the beginning, they would be making a lot more than $2.13 an hour doing slave labor for restaurant owners... (yes i'm bitter after 4 years in the restaurant business)
posted by ZackTM at 10:03 AM on April 18, 2007

(every=ever)
posted by ZackTM at 10:03 AM on April 18, 2007

If you really want to give them something material beyond an appreciative letter, you can't go wrong with a batch of homemade cookies. You're giving something of yourself, and you're not giving something of great value, so there's little chance of creating any awkwardness.
posted by adamrice at 10:31 AM on April 18, 2007

You feel all warm and fuzzy and your happiness is spilling over onto these people and you want to share your joy. That's genuinely lovely. Do not buy them gifts. You are a customer and you have already given them your business. Write a very sincere thank you letter to everyone. Recommend them to others, which is the biggest & best gift you can give them.
posted by theora55 at 10:51 AM on April 18, 2007

I almost had a fell over in disbelief when I read this question. But don't worry! We are here to help show you the way, friend!

Did your broker work like hell to get you the lowest possible price on your home? Even if they're a friend, my guess would be no, since their commission is a percentage of the purchase price, and therefore even the most ethical of people are tempted to 'grease the wheels' of the transaction and focus on closing rather than getting you a good deal. The higher the purchase price, the more the brokers make. Same with the lender.

Buying real estate is a *business* transaction, and therefore working with friends is always risky. In general, brokers have *no* interests other than: (1) closing as many transactions as possible and (2) achieving the highest possible purchase price on each transaction, no matter which side of the table (buyer or seller) they're on. If the broker helped you find a great house, then good for them, they did their job competently.

DO *NOT* 'TIP' YOUR BROKER OR LENDER. Wait for them to send you a gift using a tiny bit of that nice commission they just earned from you.
posted by onesix18 at 11:25 AM on April 18, 2007

My mom's a Realtor and the one thing she likes to get from her clients is, as stated above, referrals. Lots and lots of referrals.

She also gets flowers quite a bit.
posted by pyjammy at 12:06 PM on April 18, 2007

Thank you all for your advice. I think we are going to go with a couple suggestions. We are going to give the agent some home made cookies and a written letter of reference.
posted by birdlips at 1:29 PM on April 18, 2007

Personally, I think that delivering a written document where you praise the agent is a bad idea. Why put yourself in a situation where the truth or accuracy of things that you have said is going to be called into question if another deal goes south? I could even imagine someone suing you in that situation, although there's not much for them to stand on unless you are amazingly careless in the way that you phrase the letter. Stil..
posted by jcwagner at 9:48 AM on April 20, 2007