Hard cash is a payment method in which the buyer immediately pays the goods or services to the seller without making any installments. In relation to the house buying process, hard cash is the method of payment that has the most benefits because of possible discounts from developers, free of BPHTB fees, and no need to worry about mortgage installments for decades.

Generally, when buying a house with hard cash or cash, the deadline given is no later than one month after the agreement between the buyer and developer. More details about hard cash and its benefits will be discussed in the following article.

  • What is Hard Cash ?
  • How to Buy a House with Hard Cash
  • The difference between Hard Cash and Gradual Cash
  • Advantages and Disadvantages of Hard Cash Payment System
  • Tips for Buying a House with Hard Cash

What is Hard Cash ?

What is hard cash ? Hard cash is a cash payment system using currency (paper money and coins) as a means of payment. The difference with the non-cash payment system is that the instruments used are Card-Based Payment Instruments (APMK), cheques, bilyet giro, debit notes, and electronic money (card based and server based).

The hard cash payment system is focused on payment activities between buyers and sellers. Although it seems simple, there are payment principles that must be available in this system. Therefore, Bank Indonesia as the institution that runs the payment system in Indonesia regulates four principles, including the purchase process through hard cash .

The first principle is efficiency, this principle emphasizes the level of execution of payments. The level of implementation must be carried out in a broad and open manner, making it easier for many parties to carry out transactions. If the sender, user or recipient wants to make a payment, the fees charged must be affordable.

In addition, payment activities must be safe and must not have a high risk. Even though it has risks, this risk should be minimized and not detrimental to one particular party. For this reason, the payment system must be managed properly and often mitigated.

Next is the principle of protection for consumers, so that users who make transactions feel safe. The cash payment system is an activity between two parties, so consumers must still get protection. Consumer protection can also include maintaining the amount of cash circulating in the community. The money available for making cash payment transactions must be money fit for circulation in accordance with the money policy.

The last principle in the payment system is equality in terms of access. Bank Indonesia does not want there to be a monopoly in the ongoing activities or payment systems, either on the part of the user or the recipient. Moreover, the cash payment system is a legal transaction activity, so that if there is no equality of access, monopolistic practices and fraud will occur.

How to Buy a House with Hard Cash

When deciding to buy a house with hard cash , of course there are things that must be considered carefully. Because it means you have to pay in full up front, of course there are risks that must be considered as well. So what is the right way to buy a house with hard cash ?

As is known in the hard cash scheme, the tenor given is very short, namely one month. That means the buyer must pay off the occupancy in the same month when buying. For the procedure for buying and selling a house with hard cash , you must first find the desired residential location, then study the credibility of the developer , check the land certificate, and pay a down payment (DP).

After reaching an agreement, don’t forget to ask the developer for a house order letter affixed with a stamp. After that, you can pay according to the specified time and if it is paid off, immediately make an AJB and change the name of the certificate in front of the PPAT. Remember, in any payment method, some developers charge a booking fee . If suddenly a prospective buyer cancels the transaction, the booking fee will usually be forfeited. The amount of this fee also varies from IDR 1-5 million.

Well , that’s an explanation of how to pay with hard cash . If you want to buy a house and make payments with hard cash , the following house options can be your reference. Check the list of homes for sale in Surabaya for under IDR 1 billion here!

The difference between Hard Cash and Gradual Cash

For those of you who have a large budget , a home payment system with hard cash is highly recommended. Hard cash is a payment system that is carried out within one month at the latest, after an agreement is made between the buyer and the developer.

This system has many advantages, because usually the developer will provide a tempting house discount (about 10% – 15%). Not only that, you also won’t be bothered with monthly installments. In addition to getting a slightly cheaper house price, another advantage is that you don’t have to worry about fluctuations in loan interest rates that often soar like in the mortgage system.

So what’s the difference with gradual cash ? Also called installments , cash installments are a method of buying property in which the developer provides financing to the buyer, without using a third-party lender. As a buyer, you can own the selected property while making installment payments to the developer.

Through this scheme, the developer retains legal ownership rights to the property until the buyer repays the loan in full. Only after you pay off the payment does the seller provide a deed that transfers legal title to the buyer.

The time for gradual cash payments usually lasts for approximately 6-24 months, with the amount of interest set by the developer. Because the time period is very short, the buyer is required to submit a large down payment. The range is 30% – 50% of the house price, depending on the developer’s decision.

Advantages and Disadvantages of Hard Cash Payment System

Buying with cash or hard cash is the best way in any transaction, especially when buying a house. But of course you need big funds if you want to buy a house with hard cash . Therefore, the advantage of the hard cash payment system is that it is free from debt obligations, there are no credit binding fees, and if needed it can be directly used as credit guarantees to the bank.

However, the hard cash payment system is not without its drawbacks. Among them it takes a long time to be able to have the desired product, especially a house whose price is not cheap. On the other hand, house prices have increased every year so that if the funds are not immediately pursued, then the dream of buying a hard cash house will be difficult to achieve.

Meanwhile, products purchased in cash or hard cash are quite risky because they are not accompanied by insurance. In contrast to purchases on credit, which are usually accompanied by insurance in installments.

Tips for Buying a House with Hard Cash

Utilizing the Services of a Property Agent

When buying a house, there is nothing wrong if you take advantage of the services of a professional property agent who is a member of Rumah.com. On the Find Agent page, you can even find professional property agents based on their respective specialties, ranging from property agents specializing in apartments, commercial buildings, property agents with regional specializations, or speaking English or Chinese.

Avoid Unfinished Properties

And what you should pay attention to, as much as possible avoid buying a house or apartment that has not been finished or is still under construction by means of hard cash. It is better to choose a gradual payment according to the development of building conditions.

Negotiate Price with the Developer

Of course you don’t want to have to pay in full when the house is not finished or the handover time is unclear. And remember, everything is negotiable. Especially if you buy a house with hard cash, you have strong bargaining power. So don’t hesitate to haggle the price.