The Process of a Real Estate Purchase in Japan
We here provide a detailed explanation of the procedure and flow of buying Japanese real estate and acquiring proprietary rights to it.
Visiting Properties - Application - Signing a Contract
When you find a property you are interested in we will take you to see it. We at PLAZA HOMES have experienced bilingual coordinators who will take you to property viewings by car. We can pick you up at a convenient meeting point and drive you around the properties while explaining about the area and up-to-date market prices.
Usually if a property is vacant we can arrange a visit almost immediately but if the property is still occupied, we will generally need 2-3 working days prior to arrange a viewing appointment with the seller.
Of course, visiting properties with us is free.
When you decide on a property for purchase, you need to submit a "purchase application form"
You complete the "purchase application form" by filling in your offer price, payment method, contract date, date of delivery, and other conditions, and submit it to the Seller.
Once you and the Seller have agreed to all the major conditions, a sales contract can be prepared.
Signing a Contract
Explanation of Important Matters
Prior to signing a contract, a PLAZA HOMES' registered real-estate agent will review all important contractual matters with you.
Japanese law requires that each contract come with an Explanation of Important Matters signed and sealed by a Real Estate Transaction Specialist with a National License.
Explanation of Important Matters includes; an overview of the property as of the contract date, relationship of rights, various legal limits, infrastructure arrangements for the property, management of the building /limitation of its use, the agreed upon payment method, compensation for contract violations, and the owner's rights
Signing a Sale Contract
The contract for a Sale of Real Estate specifies the details of the transaction, the property and price along with the rights and obligations of the contracting parties. (such as Seller's obligation to Transfer the property's rights and Delivery thereof, and the Buyer's obligation of Payment of the sales price)
Items required from the Buyer at the contract signing
- Revenue stamp fee (Depending on the sales value)
- A Seal
- Deposit (10 - 20% of the sales price)
- Personal Identification Document (Driver's license, Passport)
Housing Loan Application
If you intend to fund your purchase with a loan/mortgage, you need to apply to an appropriate financial institution soon after signing the sales contract.
Each financial institution will require you to complete, sign, seal and submit a loan application form.
Financial institutions normally take between 2 to 3 weeks to process a loan application. Once approved, you will need to sign a loan agreement to finalize the conditions.
In case of a sales contract with a special clause in respect to the loan/mortgage
In general, since it is very common for potential Buyers to sign the sales contract BEFORE obtaining official approval from a financial institution for a loan, a special clause is necessary.
The clause allows for, “canceling the contract in the event that the Buyer fails to obtain a housing loan”. If a potential Buyer does have to cancel, they need to notify the Seller through an agent. In this case the sales contract usually stipulates that the whole deposit paid to the Seller and half of the commission paid to the agent will be reimbursed to the Buyer.
Note) The special clause mentioned above is generally applied when the financial institution the mortgage is issued from is in Japan. In case of using a financial institution outside of Japan, further negotiations may be necessary with the seller's side.
Payment of Interim Deposit
In the event that an “interim deposit” payment is requested by the Seller in the sales contract, the Buyer will pay the interim deposit to the Seller by the due date specified on the contract.
* The Seller shall issue a receipt for the Buyer. The amount paid as an interim deposit is applied to the total sales price.