FW-82 -- Seven Vital Hints When Buying a Home in Japan

* * * * * * * * F R U G A L W A T C H * * * * * * * *
A weekly roundup of how to be frugal in the world's most
expensive country to live (unless you read this!), written
and compiled by Wendy J. Imura.

Regular edition, December 22, 2005 Issue No. 82

- Seven Vital Hints When Buying a Home in Japan
- Credits

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*** Seven Vital Hints When Buying a Home in Japan ***

Dear Frugal Readers,

Admittedly, this topic is geared for longer-term residents of Japan,
and most likely those with Japanese spouses. Try as one might, it is
still difficult for foreigners to apply for (and be granted) a
housing loan. However, there are an increasing number of options
available for financing. Signs of a bottom in land prices,
and hints of an end to Japan's zero-inflation rate policy might
make now a good time to look at buying a house or condominium, if
that's in your future plans.

Thus, I thought I'd pass on a little advice from a handy booklet
we picked up recently - entitled "No Mistakes - Seven Tips
When Buying Your First Home," written by a veteran Japanese real
estate agent. He first lists the four most common misconceptions
about the Japanese real estate market:
1) Each real estate agent has a different inventory of homes/condos
that only *they* have access too.
***Not true. Like the United States' MLS listings, Japan also has
a national database of real estate listings, called REINS
(Real Estate Information Network Service). All Japanese real estate
agents registered with the system have access to the data online
or by fax.

2) The best way to get good information about what houses/condos
are on the market is to visit lots of real estate agents.
***Also not true. If all agents have access to the same listings,
they can essentially all provide you with the same information.

3) You can build any kind of house you want on land you own.
*** Nope. There are various zoning regulations in Japan that prevent
the construction of some types of buildings in some areas. A three-
story house, for example, may be prevented in some areas.

4) No-down-payment loans are a good idea.
*** Once again, the likelihood of a foreigner being approved for
this type of loan is slim to zilch, but if your spouse is considering
one of these, beware - many loans in Japan do not feature fixed
interest rates, and some include balloon payments or large
payments due at bonus time. Read your loan contract carefully.

Okay, without further ado, - here are the seven tips:
1) Choose a reliable real estate agent. What's one way to do this?
Check the Japanese listings (usually newspaper inserts or one
of the proliferating free magazines available) for the real estate
agent license information, which is usually formatted like:
"Hyogo-ken Chiji (3)-1234" (Hyogo Governor <3>-1234) The small
number in parenthesis is the number of times the real estate
agent's license has been renewed. As all agents are required to
renew once every five years, a number (3) indicates that the agent
has been in business for at least one year after two renewals.
While this is not an indicator of quality, it will tell you,
generally, how long the agent has been in business.

2) Be careful when using the telephone to inquire about real
estate listings. Most people find a listing they like, call up
the agent, and inquire about the plans. However, they usually
end up regretting this: real estate agents are extremely persistent
and will call many times a week or even a day, even if you purchase
a home with another agent! (Their sales quotas are extremely
tight.) Most real-estate agents have caller-ID systems on their
phones, and will find out your phone number even if you don't tell
them. Dial "184" (no ID) when you call to inquire about real
estate listings.

3) Be careful which real estate salesperson you choose. Many
are quite persistent, again, and will ask you your name, telephone
number, and address before even giving you the information you need.
Instead of offering this information first, just ask "Where is
the home/condo listed on page XYZ of the leaflet you first
sent out?" (In Japanese, of course.) Agents that do not disclose
this information without getting your personal details are not
worth dealing with, the author says. He also recommends using email
to correspond with agents instead of the phone.

4) Be careful when meeting the salesperson for the first time.
A good real estate salesperson will first talk with a customer
about what they want in a house, what their budget is, and other
information before introducing a particular listing. Thus, even
if you visit a real estate agent with a particular listing in mind,
don't trust an agent that launches into a hard-core sales presentation
the minute you walk in the door. Chances are they don't have your
best interests in mind, just the sale.

5) Avoid salespersons that push too fast, including lines like
"If you don't hurry, someone else is going to buy this house/condo."
This is really just a sales technique to push you into buying
faster. Also, avoid salespersons who introduce listings over
your budget and try and talk you into borrowing more than you
can afford.

6) Read real-estate ads carefully. Many times, fake ads that are
really too good to be true are put in to lure customers into an
office. When a client arrives asking about that particular listing,
they agent simply says that it has already been sold, but they have
a similar house that is "just as nice" for a little bit more money.
Ads of this type are called "hikimono."

7) Finally, one must also be careful about real estate listings
online. In many cases, agents are good about putting up information
but often forget to update it. Thus, many of the listings you see
might be old or already sold. Be sure and call ahead of time to see
if the listing your are interested in is still available.

Whew! Today's article was a long one, but I hope you found it
interesting. Armed with this information, you'll hopefully be a bit
wiser, and find house-hunting just a little bit easier.

Frugally yours,
Wendy J. Imura

PS: Interested in the person who wrote this booklet? His name
is Masaru Osawa, and he owns is own real estate firm in the
Century 21 Group (called Sakura Housing). He is currently
located in Nishinomiya in Hyogo prefecture (Kansai), and
can be reached at 0120-63-8450. (www.sakura21.com)
I must add that there is no indication anywhere that he speaks
any English or serves foreigners - I translated the information
from the Japanese booklet myself.

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Written by: Wendy J. Imura (frugalwatch@japaninc.com)
Edited by: JI

Copyright 2005 Japan Inc. Communications Inc.