Expat in Japan—There are various current building projects in Japan, particularly in the Tokyo area, which provide countless chances for locating a suitable, opulent home in a wonderful location. Japan is slowly opening its doors to the rest of the globe, and the number of expats in Japan increased to about 2.7 million in 2019, accounting for nearly 4% of Tokyo’s population. However, if you are an expat looking to buy a property in Japan, whether for personal use or as an investment, there are a number of things to consider, including legal procedures, finance, and cultural differences that affect successful real estate purchases.
Buying a home necessitates assembling your own team of pros, including a broker, loan officer, judicial scrivener, and tax advisor. Trading real estate will become lot easier once you’ve formed this team and established a relationship.
Is It Even Possible For An Expat In Japan To Invest In Real Estate
This is the first and most important question to address. You can buy land and homes in Japan as an expat, thus the answer is yes. There is no requirement for citizenship or a resident visa. In truth, the process is much simpler than you may expect, and both Japanese and non-Japanese buyers are subject to the same rules and legal procedures. In comparison to other Asian countries, where land and real estate ownership is more rigorously regulated by the government, Japan is rather unusual.
For years, Housing Japan professionals have assisted people looking to buy real estate in Japan, allowing us to turn our knowledge into a step-by-step, best-practice guide for buying a home in Japan.
How Can An Expat In Japan Contact A Realtor
You need reliable advice from local real estate pros when making such a huge decision as investing your money in a property. This is due to a variety of factors.
Your first step should always be to speak with a real estate agent about your desired location, property specifications, and budget. This will necessitate the signing of a commission agency or broker agreement. In Japan, the statutory brokerage commission is 3%.
Before Viewing A Property, An Expat In Japan Consults With A Bank
Many purchasers who decide to buy a house in Japan make the following mistake: they go directly to viewing without first securing their financing choices. The egg that follows the property chicken is financing. Now, if you want to pay cash for your new home, that’s no problem; but, we’ve heard of situations where potential purchasers spend time researching and inspecting a luxury home in Tokyo only to discover they can’t receive a loan from a Japanese bank.
A verbal pre-approval is another reason to prioritise financing over property comparison and viewing. When negotiating with the seller, Japanese banks might unofficially pre-approve your loan request, which can be a powerful bargaining chip. As an expat, you should be aware that Japanese society is highly reliant on trust, and even a seller’s confidence and willingness to conclude the purchase might be boosted by verbal clearance from a bank.
Viewing Properties As An Expat In Japan
After you’ve looked into financing alternatives, you may start looking at properties and comparing them to one another. It’s critical to have a trustworthy advisor on your side during this process to ensure you’re aware of market norms and can manage your expectations realistically. For thorough due diligence, always ask your agent to accompany you to the on-site viewing.
It’s critical to recognise that property features and standards in Japan differ significantly from those in the United States or Europe. For example, finding a house larger than 100m2 with two (or more) bathrooms can be difficult. In fact, just about 1% of new flats built in Tokyo in 2017 were larger than 100 square metres. Don’t be dismayed, however, because about 37 thousand new condos were built in Tokyo in 2018, an increase of 2.2 percent, with many of them being luxury estates. Our best recommendation for locating suitable luxury homes in Japan is to check with your realtor to see if they have any off-market properties in their inventory.
Housing Japan has a staff committed to finding the best off-market real estate deals in the country.
Expressing Your Desire To Buy A Home As An Expat In Japan
After you’ve decided on a house or apartment, you’ll need to submit a Letter of Intent (for pre-owned properties) or an application to purchase the property (for newly built properties). From that point on, you are regarded as a serious buyer. The Letter of Intent is handled on a first-come, first-served basis, which is another another reason why having finance in place first will allow you to act faster than your competitors.
As An Expat In Japan, You’ll Have To Negotiate And Make Initial Payments
Your agent will next negotiate (with the seller) the purchase price, possible payment options, payment timelines, and other specifics. As both parties create legal paperwork, complete final due diligence, and complete formalities, this procedure might take anywhere from a week to a month. This is also the time to apply for a bank loan if you plan to finance your purchase with a mortgage.
As An Expat In Japan The Process Of Completing The Contract
An “Explanation of Important Matters Regarding the Property and Transaction” should be provided by your agent. This is a collection of paperwork that includes the owner title registration, ownership type, legal description of the property, and any contract cancellation terms.
A monetary deposit should be made to the seller at this point (usually 10 percent of the property but can be less in some cases). Many expats are surprised by this because earnest money is generally given to a third party, such as an escrow company. The premise is that because Japan is a trust-based country, paying a portion of the fee up advance shows commitment and strengthens trust. To be clear, even those who buy a house in Japan with a mortgage must pay a deposit.
As An Expat In Japan, You’ve Finally Made It
The final settlement is normally conducted by a judicial scrivener and takes place at the buyers’ bank. The buyer will transfer the remaining sum to the seller’s account, and the buyer will receive the title to the property. The seller hands over all of the keys to the property at the end of the transaction, and the transfer of ownership is complete.
Allow the specialists to handle every aspect of the procedure.
If you can’t afford a down payment of at least 20% of the property price, most Japanese banks will issue you a loan; however, this may vary depending on the lender.
Property tax, registration fees, and property management fees are examples of additional charges.
When An Expat In Japan Buys A Home, There Are A Few Things To Keep In Mind
Many foreigners considering purchasing a home in Japan may be surprised to learn that no attorneys are involved in the formal property purchase procedure. In Japan, licenced brokers are expected to act as both a broker and a lawyer in every real estate transaction they manage. Due of the difficulties of passing the real estate exam, the law states that one full-time hired licence holder can cover up to five salespeople.
This means that the licence holder is responsible not only for their own contracts, but also for the contracts of five other employees. This creates a situation in which someone can practise brokerage without a licence for many years while being supervised by a licence holder. When a broker obtains a licence, they will have a plethora of real-world experience to draw upon, as well as the ability to stamp their own contracts. Another reason why, when trying to buy a home in Japan, hiring a reputable, competent agency is critical.
Finally, be aware that much of the documentation you will get during the process will be in Japanese only. Regardless of whether or not translations are provided by your agency, only the Japanese texts of the laws and regulations have legal effect, and the translations are only to be used as reference resources to aid in the comprehension of Japanese laws and regulations. As a result, it’s critical to ensure that the firm you hire has not just the necessary experience but also a trustworthy legal team.