2 Percent Cash Back: What It Really Means for Property Buyers

When you hear 2 percent cash back, a rebate offered to buyers at closing, often as a percentage of the purchase price. Also known as buyer incentive, it’s not free money—it’s usually a reshuffling of costs that affects your final deal. In India’s competitive property market, some builders and agents promise this to lure buyers, but few explain how it’s funded or what you might be giving up in return.

Here’s the truth: real estate commissions, the fees paid to agents, typically range from 1 to 3 percent of the sale price. When a buyer gets 2 percent cash back, it often means the agent is reducing their own cut, or the builder is inflating the price to cover it. This isn’t charity—it’s a tactic. Some developers use it to make a higher-priced unit look like a better deal, while others bundle it with longer payment plans or fewer upgrades. You might walk away with ₹1 lakh back on a ₹50 lakh flat, but if the base price was inflated by ₹1.5 lakh, you’re still worse off. And in cities like Bangalore or Pune, where competition is fierce, you’ll see this offer pop up in new launches, but rarely in resale listings. That’s because resale sellers don’t have the same leverage to absorb costs.

Don’t confuse buyer rebates, cash incentives paid directly to the buyer, often through the agent. Also known as cashback offers, they’re legal in India as long as they’re disclosed properly. But here’s what no one tells you: if you’re using a home loan, the bank bases your approval on the registered sale value—not the cash back. So if the property is registered at ₹50 lakh and you get ₹1 lakh back, your loan still comes from ₹50 lakh. You’re paying interest on money you never actually borrowed. That’s a hidden cost that can add up over time.

Some buyers think cash back is a shortcut to savings. But the smartest buyers look at the total package: location, construction quality, maintenance charges, and future resale value. A ₹1 lakh rebate means nothing if the building has poor water supply or the society charges ₹15,000 a year in maintenance. And if you’re buying to rent, that cash back won’t help you cover vacancies or repairs.

What you’ll find below are real cases from Indian buyers who took the 2 percent offer—and those who walked away. Some saved money. Others ended up paying more in the long run. We’ll show you how to spot the difference, what questions to ask before signing, and how to negotiate better terms without falling for the illusion of a deal.