The Buying Process
In the current market it is difficult to negotiate the price down as there are many bidders and almost no sellers. However in a normal market a discount of 5 to 10% of the asking price is reasonable, but it really depends on the property and the seller. Some properties are priced very reasonable and in such a case you should bid the asking price immediately, as otherwise someone else will take it. Other properties are priced too high and in such cases asking a discount of 20 to 30% is prudent. But in times when market prices are moving upwards it is common not to be able to get a discount at all.
Normally we start with making an initial low bid without asking for details about the property. Make sure not to bid too low: it offends the seller and you will not be considered anymore afterward. If the seller is interested, ask for more documentation and raise the bid. Be patient and respectful: most sellers are in their 70s and they are selling due to their advanced age, not because there is anything wrong with the property.
When a bid is accepted the seller’s broker will prepare the contract. We then proceed with the due diligence. During this process we check all the relevant details of the property. This includes the land, building maintenance records and management, rental payments (if any), zoning, etc.. When this is completed we provide a single page summary of the contract and the conclusions of the due diligence. This process normally takes 2-3 weeks. However it depends on how quickly the seller provides the required documentation.
You can sign the contract either with a registered seal (hanko) or your signature. You will need proof of residency. For Japanese citizens this is called a juminhyo, for foreign residents in Japan it is a touroku genpyou kisai jikou syoumeisyo (登録原票記載事項証明書). For non-residents a notarized statutory declaration is required for which we will provide the template. The scrivener who handles the title transfer will confirm your identity and intentions. In case where the settlement is not done at contract date the buyer normally has to put up a 10% deposit. This deposit does not go into escrow. Therefore we check if the owner has excessive mortgage obligations or other debts related to the property. If that is the case we request the selling broker to hold the deposit until closing
At the closing day everyone will come together. The transfer of the title deed and the payments will be made simultaneously. Large payments are normally done by domestic bank transfer, smaller ones by registered check and sometimes even in cash. If you can not make it to the closing, everything can be done through a Power of Attorney as well.
Non resident bank account in Japan
No bank in Japan is allowed to open a regular bank account for a non-resident without marking it as an overseas account. This means that anyone transferring funds into such an account would have to use the international wire transfer form and pay the associated 6,500 yen transfer fee per transaction. And recently banks are increasingly checking the residency status of existing account holders as well. Several clients had their accounts closed after they moved out of Japan. To get a local bank account as a non-resident you would have to set up a local corporation, with all the tax and accounting consequences.
Non-residents therefore can have a trusted friend come to the closing and make the payment. Otherwise they can transfer the funds to Akasaka Real Estate a few days before. For the property management there is no need to get a Japanese bank account as Akasaka Real Estate will handle all the transactions.
After the closing the scrivener will register the new owner with the local registration office. They issue a new title normally within 2-3 weeks. The scrivener can send the title to the new owner. For owners living abroad we recommend that we keep the title in the safe at our office as some overseas postal services are not reliable enough to be entrusted with such a hard to replace document. If required, we can send a title with a special mail delivery, but this will come with an extra cost and still is not without risk of losing the title.