This is general information, not legal advice. Rules change and your broker may have stricter policies. Check with your broker and a real estate attorney in your state before you offer any reward.
The short answer
At ACE, we build real estate campaigns so the reward is for engagement only. A homeowner can unlock a real gift card, like a coffee on you, for watching a short video, signing in at an open house or requesting a home value update. It's never tied to listing, buying, selling, closing or sending you a referral. Each campaign is reviewed with you, and we ask that your broker signs off.
The three sets of rules
1. RESPA (federal)
The Real Estate Settlement Procedures Act bars giving or taking anything of value for referring settlement service business. That covers agents, lenders, title companies, inspectors and other providers involved in a closing.
- You can't pay a lender or title rep for referrals, or take money, gifts or free marketing from them for sending clients their way.
- Shared marketing with a lender has to be split fairly, with each side paying its own share.
- Rewards paid by a lender or title company to your consumers for using them are a red flag.
2. State license law
States decide whether you can give anything to an unlicensed person for a referral. They don't all agree.
- Some states ban it. In Pennsylvania, for example, giving an unlicensed person a gift for a referral is treated as an illegal referral fee.
- Some states allow a small gift with limits. Texas, for example, allows a gift card of up to $50 that can only be used for merchandise.
- Many states have rules on advertising offers, like clearly stating any conditions on a "free" gift.
3. Fair Housing
Who you reach matters as much as what you give. Target by area and behavior, like homes in a neighborhood or people checking home values, never by race, religion, national origin, sex, disability, family status or any other protected group.
Usually fine, check first, avoid
Usually fine
- A small reward for watching a short video from you
- A coffee card for signing in at an open house
- A home value update or market report
- A thank-you note or call after a referral
- Client appreciation events open to all your past clients
Check with your broker first
- A small gift to a past client after they refer someone
- Contests, drawings or sweepstakes
- Rebates or credits at closing
- Any offer advertised as "free"
Avoid
- Paying anyone unlicensed for a referral in a state that bans it
- Payments, gifts or free marketing between you and a lender, title company or other provider for referrals
- Rewards that only unlock if someone lists, buys or closes with you
- Targeting or leaving out people based on a protected group
How to set up a reward the safe way
- Reward an action, not an outcome. Watching, signing in or requesting information, not listing or closing.
- Keep it small. A coffee or a lunch, not cash.
- Make it available to everyone you reach. No special deals for certain groups.
- Spell out the terms. Say what earns the reward and when it expires.
- Pay for it yourself. Not a lender or title company.
- Get broker sign-off. Keep a copy of what you sent.
Where ACE fits
ACE rewards only verified engagement. The video can't be skipped, the sound has to be on, and the reward unlocks once the person has watched at least 75% of it. They have 30 days to claim it. That gives you a clean record of what each reward was for. If you want to get more referrals, stick to staying in touch and asking, and check your state's rules before rewarding anyone for one.
What we've seen
Across ACE campaigns, engagement has ranged from about 5% to 28% across direct mail and digital. Rewards for watching a short video keep the offer simple and easy to explain to your broker. These are past results, not a promise for your business.
When this isn't the right fit
- Your broker doesn't allow any consumer rewards. Use home value updates and staying in touch with past clients instead.
- You want to reward closings or referrals in a state that bans it. Don't.
- You want to target certain groups of people. That breaks Fair Housing rules.
Learn more about ACE for realtors.
Frequently asked questions
Can realtors give gift cards to clients?
Usually, yes, when the gift is small, given freely and not tied to a referral or closing. Check your state's rules and your broker's policy first.
Can a realtor give a gift card for a referral?
It depends on your state. Some states, like Pennsylvania, treat any gift to an unlicensed person for a referral as an illegal referral fee. Others, like Texas, allow a small gift with limits.
Does RESPA apply to closing gifts?
RESPA is mainly about payments between settlement service providers for referrals. A closing gift you pay for yourself isn't usually a RESPA problem, but a gift paid for by a lender or title company can be.
Can a lender pay for my client gifts or marketing?
Be careful. Under RESPA, a lender or title company can't give you things of value for sending them business. Shared marketing has to be split fairly.
Can I offer a reward for coming to my open house?
In most places, a small reward for signing in is fine if it's open to everyone and not tied to buying. Check with your broker.
How does Fair Housing affect real estate marketing?
Target by area and behavior only. Never target or leave out people based on a protected group.
About the author
Jake Nicks is the founder of ACE (Actual Consumer Engagement), a customer acquisition firm in Frisco, Texas. He has 10 years in paid media and has directed more than $2 billion in ad spend. ACE's verified-action gift card technology is protected by U.S. Patent No. 11,847,634 B2.
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