Four Rules Buyers Should Follow When Purchasing Real Estate in Japan

“4 Common Mistakes to Avoid When Buying Real Estate in Japan: Advice from an Experienced Agent”

Buying real estate in Japan can be a daunting task, especially if you’re not familiar with the industry’s customs and regulations. Even small oversights can cause big problems and ruin your chance of closing a deal.

In this article, a seasoned real estate agent shares practical advice and insider tips to help you navigate the real estate market in Japan. By following these guidelines, you’ll be better prepared to avoid common mistakes and ensure a smooth transaction. So, let’s dive in and learn how to buy real estate in Japan like a pro!

Be Honest and Transparent About Your Financial Planning

When purchasing a property, real estate agents will always ask for your financial plan. This is to confirm whether you have the purchasing power and if your desired budget is feasible, among other things. Failing to confirm these details at the outset can result in wasted time and disappointment for both the client and the agent.

Specifically, the agent will ask you about the following:

• Whether you will be using bank financing
• Your annual income
• Your personal funds available for the purchase
• Your employer and length of employment
• Your employment history
• Whether you are a full-time employee
• Your family composition
• The balance of any outstanding debt

While all of these details are important, it is crucial that you do not hide any debt or falsify your income, as this can ultimately result in being unable to secure bank financing and the property being unattainable. This not only causes problems for the agent, but also for the property seller.

Even if you falsify your income or hide any outstanding debt, you will ultimately need to provide your tax documents for the bank financing approval process. Additionally, financial institutions can easily verify any outstanding debts through inquiries. Dishonesty in your financial planning is a completely futile act, and it should always be avoided.

Purchasing a Property Through the Agent Who Showed You Around

In the real estate industry, it is strictly prohibited to bypass the real estate agent who is acting as the seller’s agent or buyer’s agent and negotiate directly with the seller or buyer. This can result in being blacklisted from future transactions.

While real estate agents understand this rule, it may not be clear to amateur clients. Some clients may try to use another agent to get a discount on the property they viewed with their original agent.

If the agent who showed the property finds out, it can lead to serious trouble. They may even retaliate or refuse to work with the client, causing delays in negotiations and potentially causing the client to miss out on the property altogether.

However, if the reason for wanting to use a different agent is due to the original agent’s negligence or lack of professionalism, then it may be understandable. In this case, it is important to clearly communicate the reason to the original agent before seeking the help of another agent.

Don’t Submit Purchase Applications for Multiple Properties Simultaneously

It is a common misconception to think that if you have two properties that you equally like, you can submit purchase applications to each property through different real estate agents at the same time. However, this is a big mistake.

This might work in the case of a lottery for a product or service, but when it comes to real estate purchases, it involves a transaction with a flesh-and-blood seller. Submitting purchase applications to two properties at the same time means that you will have to give up one of them inevitably once the purchase for the other one is finalized.

This is an extremely disrespectful act towards the seller who received the purchase application.

Once the real estate agent finds out that you have submitted purchase applications to multiple properties, they will stop providing you with any future property information and transactions. Furthermore, the seller will never accept any purchase applications from you again due to the lack of trust.

Don’t Discuss Prices in Front of the Seller

During property tours, it’s common for the buyer and seller to come face to face when the seller is still occupying the property. While it’s understandable that the buyer may have many questions about the property, it’s important to avoid discussing negotiation details such as price and terms directly in front of the seller.

Although the real estate agent will try to intervene, some clients can still inadvertently speak out of turn. The main reason to avoid this is to maintain a positive impression on the seller.

Saying things like, “I’m just trying to negotiate before even making an offer” may offend the seller and make them more reluctant to negotiate with you later on. Keep in mind that there’s no benefit to speaking out of turn, and it may even harm your chances of getting a good deal in the future.

Final Thoughts

Being honest, not being ungrateful, not being disrespectful to your business partners, and not damaging their impressions are all obvious things when you think about them.

However, when faced with a big purchase like real estate, it is human nature to sometimes say something unintentional or step outside the usual procedures that you would not make mistakes on in your everyday life.

Real estate transactions always involve many parties to support the buyer’s transaction. Bankers, notaries, surveyors, demolition workers, tax accountants, and so on.

It is important to value and appreciate the partners who are always supporting you and to make the transaction a pleasant experience.

I hope this article will be helpful in your property purchase.

Thank you for reading this far again.

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