As the calendar or financial year end approaches, potential car buyers are enticed by attractive deals in the automobile sector. These irresistible offers are financially attractive and are key drivers of luxury automobile sales — it is the dealer passing on a part of his payout on the sale to the buyer.

These 'Dealer Discounts' aim at getting aspiring customers to buy luxury on wheels. This effective sales accelerator seems to be making its way to the luxury real estate segment.

Consider that the luxury real estate launches in Thane in recent times have witnessed a scenario where potential buyers have been offered 2% to 3% of the agreement value as 'dealer discount' or 'cash-back' by property brokers — if they take the 'buy' decision.

Does this 'cash-back' work when it comes to luxury real estate sales? A section of real estate intermediaries suggest 'yes'. This 'cash-back' is seen to be a part of the negotiations by home seekers considered to be tough negotiators.

In effect, it is about a potential luxury home buyer taking the 'buy' decision for a property valued at ₹5 crore-plus for a cash-back of a few lakh rupees. Does this reflect upon the legendary bargaining nature of the Indian consumer, or is it a bit odd — that the 'buy' decision of a home buyer picking up a ₹5 crore-plus property happens because of the inducement of a cash-back of a few lakh rupees?

If it is a slow-moving project being speeded up, or a stalled project that is being revived with a leading real estate brand, and an intermediary tries to sweeten a potential deal by offering a part of his payout to the buyer — like a luxury car dealer — that might not seem out of place.

There's the other side of the coin: the intermediary gets about 2% of the deal value, as per industry norms. The property grapevine suggests that in some instances, the home seeker went from one broker to another, shopping for a better cash-back deal. And one hears of deals being closed at 2% cash-back — effectively the entire payout that the intermediary gets on the deal.

If this seems difficult to understand, there's a rising number of grumbling home buyers who are yet to receive the entire amount of the promised cash-back. Effectively, these are situations where buyers have taken the 'buy' decision lured by such cash-back schemes from intermediaries and are still waiting to get their promised sweetener.

Are such home buyers most likely paying the price for entrusting their 98% for a cashback of 2%? Will we see luxury home buyers struggling to get the cash-back, and the intermediary not responding to their calls?

In my experience of 20 years as a real estate intermediary, I have experimented with many schemes — but this cash-back is unique, given that the intermediary offers the entire earning or more than he gets from the developer. That's where the catch lies.

A senior property broker I spoke to recently mused whether we have reached a point where the home seeker is no longer interested in getting the right property consultancy and decides based on who gives a larger cashback.

Thane's luxury housing is on a growth curve, and as new offerings make their presence felt, hopefully, the luxury home journey will work out the right way.

— Prashant Puri, Managing Partner, Horseshoe Realty