Buying a rental through a realtor. Do I send a bonus?

[Arjay Estrella]

Hello fellow investors! I am purchasing my first rental property out of state through a realtor (purchased for 57k) and I am wondering if I should send her a monetary bonus? If so how much? Also should I wait until after it's been refinanced? It is my first BRRRR attempt. Thanks!

[Steve K.]

Yes, you should definitely give her a generous bonus ;) Just kidding, it's not customary, nor technically legal as a real estate agent cannot receive money for anything related to real estate services unless it goes through their broker, but super nice of you to consider. You could send the money to her broker, let them know it's a bonus and request the broker give it all to her I suppose. I think it's rare but I've had clients buy me nice gifts after closing, which I believe is completely acceptable as long as an agent isn't accepting money directly.

 Her commission, which typically comes out of the seller's proceeds, is kind of low in this case due to the total sale price of $57k. She's probably earning somewhere between $1,425 and $1,710 total (2.5-3% of sales price). Then she'll have to pay a commission split with her broker, probably a transaction fee and/or franchise fee, and income taxes out of that total amount. So she'll probably get to keep around $900-950, which probably breaks down to around $30-50/hour depending on how much time she spent on the deal. If she did an exceptional job you might consider a gift. Sending flowers would probably be sufficient, and is more than most people would do. Your repeat business and referrals are the best gift you can give an agent.