Specializing in Tokyo homes for sale and the Central Tokyo Real Estate market, you have found your Realtor resource for buying and selling your next Tokyo home. With expertise in realty for both purchasing and listing properties in Minato-ku, Shibuya-ku, Shinagawa-ku, Meguro-ku, Setagaya-ku, Oota-ku and all surrounding city wards in the Tokyo area, you have found the right resource for all of your Real Estate needs. Whether you are looking for a new Azabu home or land in Yoyogi or are in the preliminary stages of a Tokyo Estate search, you have found professional English service.
Through my Real Estate web site, you will find useful information and the tools necessary for your Tokyo property purchase. In addition, my web site features comprehensive community information and links for Central Tokyo areas that can help guide you in making the right buying and selling decision.
- Application to purchase a property.
- Unless this application is submitted, sellers are seldom open to negotiate.
- Often sellers require loan pre-approval before taking the property off the market.
Loan pre-approval is recommended to get an idea of how much of a loan is possible and also helps with setting a realistic budget. Having the option to move quickly once a suitable "property has been found is a luxury that you will want." - When you fill out the application, you will select a date to sign the contract. This is generally a week from when you submit the application or the amount of time it will take for you to prepare the necessary funds to sign the contract.
- Contract
- Explanation of the contract
- Contract signing / stamping
- Buyer pays Seller deposit, Seller issues a receipt to Buyer (generally 10%)
- Formal loan application (2-step process)
- Since loan pre-approval should already be completed, a formal loan application with the bank is the next step to proceed with the loan.
- Documents from the contract to formally apply for a housing loan are needed.
- A seal (hanko) and seal registration are also required. (This can be done in 1 day)
- The details of the loan are gone over once the formal loan application
has been approved.
Subsequently, the funds will be prepared for the closing of the property and title transfer.
- Closing & Title Transfer
- Buyer makes payment of remaining funds to Seller
- Liens on the title are removed
- Title is registered into Buyer’s name
- Purchase fire insurance (excludes land)
This concludes a quick overview of the process to a Tokyo Property Purchase.
Applying for a loan and the documents involved in the whole house buying
process can be overwhelming.
The necessary documents include yearly income statements, registered seal, registration
certificate for you seal, Alien Registration Card, Alien Registration Certificate,
and Japanese Health Card. You also need documents regarding the property you
want to buy including certificate of purchase, schematic layout of the property.
There is a lot of documentation involved for a home loan which can be quite overwhelming
if you do not know what you are doing. In regards to being a foreigner in Japan,
work permit visa, no Japanese spouse, this all depends on where you work. Mitsubishi
Tokyo UFJ, SMBC and Mizuho have approved loans in the past to foreigners without
PR, but again, this all depends on where you work and how much you intend to
borrow on the property and if you have a Japanese spouse or not. The
loan does not cover the 5-7% involved in closing costs for the property.
There are also other financial institutions that offer loans to ex-pats. Though
their interest rates are higher, you have a chance to get more loan to property
than a prime bank though the interest rates are higher. Interest rates are still
cheaper than overseas though. For instance, Suruga Bank, GE Money, Shinsei Bank,
New City Mortgage, Nihonbashi Jutaku Loan...etc
*** Mitsubishi Tokyo UFJ will only loan up to 35% of your income (If your monthly
income is 1,000,000 JPY; 12,000,000 JPY annually, your max monthly payments,
assuming you have no other debt in Japan would be 350,000 yen) ***
SMBC Mitsui Sumitomo bank will look at over 40% of your income. Using the same
criteria, you can be loaned more and your max limits would be over 400,000 JPY.
Same person, 2 different banks:
MUFJ Loan: 79,000,000 JPY
SMBC Loan: 92,000,000 JPY <------------- I would choose SMBC if I was eligible!
I always recommend going through an estate agent for a home loan, only if the agent has good connections. There are multiple reasons for this.
- If the agent knows what they are doing, they are much quicker. This can mean you get the loan in time before the property sells to someone else or you lose out because it took too long for the loan pre-approval. If it’s a good property, you can bet other buyers are interested as well; Japanese or Ex-pat. It’s a speed race at that point and Foreigners take just a little more time than Japanese citizens.
- The agent should know what the necessary documents are, have the necessary documents already or have access to them. They also know what to show the bank and what not too. If you supply unnecessary information regarding the property or about yourself, this can complicate things and even sacrifice your chances of getting an approval at all. A good realtor knows what to tell the loan agent and what to keep quiet about. And believe me; you do not want to be at the Public Affairs Bureau and the Ward Office trying to retrieve these docs.
- Agents can get a better discount off interest rates for you. Some people may have lost out on 0.2% or even 0.4% and that can add up huge over 20, 35 years. This makes a difference on your monthly mortgage payments.
- Can easily apply to multiple banks simultaneously. We know your situation; we know which banks offer what and which will decline to give you a loan. No wasted time there IF YOU TELL THE TRUTH!
- I do not get a commission or referral fee from any of the banks or financing institutions I use and I do charge 50,000 yen (for closed sales clients only). You would end up spending your own money if you chose to find financing yourself and I could probably save you much more than that in the interest rates. The real main reason is for the estate agent to be in touch with the loan agent directly and get up to date information, even outside office hours. To follow up on additional documentation, should they ask. To push the loan agent to move quicker. This can be time consuming or inconvenient for you while you are working and since it is my job to do so, I make the time. It is in the best interest of all parties, whether it’s the Seller, Buyer, or Agent to get things done as quickly and smoothly as possible. If there is no loan then there is no sale.
It is safe to assume that the closing costs involved for any given property
purchase will cost an additional 7% of the property price.
Here is an itemized list of the taxes, fees, and commissions that make up the
closing costs for a Tokyo Property Purchase.
PROPERTY TAXES & INSURANCE
- Stamp Duty Stamp which is placed on the real estate contract once signing has been completed. This is a national tax. Stamp duty varies depending upon the property price, incrementally increasing by bracket.
- Property Tax / Urban Planning Tax Based on appraisals of the property by the government. The amount due will be calculated for the remainder of the year starting from title transfer. This is an annual property tax which the new owner will be responsible for the full amount the following year.
- Fire Insurance Self explanatory; Earthquake Insurance is not included but can be added on. Banks usually require at least 1 year but can go up to 35 years. Discounts applied for longer term contracts.
BANK
- Stamp Duty A different stamp which is placed on the home loan contract once signing has been completed. This is a national tax. Stamp duty varies depending upon the loan amount.
- Loan Processing Fee If under 100M yen 31,500 JPY, over 100M yen 63,000 JPY as two contracts will be required.
- Loan Guarantor Fee This ranges from 0 to about 2% of the loan amount. There is a way to waive this 2% guarantor fee by tagging on 0.2% to your interest rates. This helps to reduce the up front costs involved.
REGISTRATION
- License Registration Tax Removal of any liens on the title and transferring the title from the seller’s name to the buyer’s name.
- Judicial Scrivener Commission A fee paid to judicial scriveners, also known as “shiho-shoshi lawyers”, one of the legal professions in Japan. Judicial scriveners are authorized to represent their clients in real estate registrations and filings with legal affairs bureaus. Judicial scriveners must pass an examination administered by the Ministry of Justice; the overall pass rate just 2.8%.
REAL ESTATE COMPANY
- Loan Processing Commission This is for preparing the loan by gathering the necessary documents and submitting the formal loan approval application on the buyer’s behalf.
- Real Estate Commission 3 percent of the property price plus
60,000 yen and consumption tax.
[(3% + 60,000 yen) X 5%]
This formula is the same regardless of which real estate company a buyer purchases with.
