Do Buyers Give Gifts to Sellers? What to Know

Do buyers give gifts to sellers? While not a universal practice, buyers sometimes extend gestures of appreciation to sellers. This article explores the circumstances that lead to such gift-giving, the motivations behind these actions, and the considerations buyers should keep in mind if they choose to offer a gift.

When Buyers May Consider Gifting

Buyers might consider giving a gift to a seller in significant personal transactions. This often arises in real estate, particularly when purchasing a cherished home or unique property. The process of buying a home can be highly personal, leading to a desire for a gesture beyond the financial exchange.

Another scenario involves the acquisition of small businesses, especially those where the seller has built a long-standing reputation or a personal relationship with customers and employees. In such cases, a buyer might offer a gift to acknowledge the seller’s legacy or to foster a smooth transition for the business’s future. These transactions can cultivate an environment where a gift feels appropriate.

Underlying Reasons for Buyer Gifts

The motivations behind a buyer’s gift to a seller stem from genuine sentiment rather than a transactional obligation. A primary reason is to express gratitude for a positive experience or a fair deal. This appreciation can arise from the seller’s transparency, flexibility, or exceptional cooperation throughout the transaction process.

Gifts can also serve to build goodwill and foster a positive ongoing relationship, especially in business contexts where the buyer might rely on the seller for continued support or insights. A buyer might aim to acknowledge exceptional service provided by the seller, recognizing efforts that went beyond contractual requirements. This gesture can solidify a cordial relationship, which may prove beneficial if future interactions are necessary.

Factors to Consider When Gifting

When a buyer decides to give a gift to a seller, several factors warrant consideration to ensure the gesture is well-received. The nature and value of the gift should be appropriate for the transaction and the relationship dynamic. Gifts that are thoughtful and personal, rather than overly extravagant, are preferred.

The timing of the gift is also important. Gifts are exchanged after the completion of the transaction, such as after closing a real estate deal. This timing helps ensure the gift is perceived as a genuine gesture of appreciation, rather than an attempt to influence negotiations or create an obligation. For tax purposes, gifts of money or property from one individual to another are not deductible for the giver, nor are they considered taxable income for the recipient, provided they do not exceed annual exclusion amounts. For 2025, the annual gift tax exclusion is $19,000 per recipient. If a gift exceeds this amount, the donor is responsible for reporting it to the IRS on Form 709.