PII-31 -- How to qualify for mortgage financing for residential property in the US

Personal Finance Intelligence for the Tokyo Community
Personal International Investor
Vol. 31
October 20, 2005 Tokyo

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How to qualify for mortgage financing for residential
property in the US
(By James Robinson, Propius Investments Ltd. | October 20, 2005)

So you have decided that you want to take advantage of the financial
benefits of investing in residential property in the United States.
You have completed your goals and planning document. You have
saved your down payment money. You have researched and
selected the real estate market that you think has the most
upside potential. Now you need to find financing and get

Click here to

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Looking for a House - Your Real Estate Agent (Part One)

An essential contributor to successfully finding and buying a home
is your real estate agent. There is virtually no market for private
sales in Japan, and even if you find a plot out in the countryside
which takes your fancy, you need find an agent which is handling
that property and who will intermediate with the owner for you.
Why the fixation on using agents I’m not sure, but would guess
that because land has traditionally been so expensive here,
buying a home is a once-in-a-lifetime activity and people are
just scared to do what they’re not familiar with.

Choosing the right agent can be important - both in terms of finding
the right spot and also negotiating. In a large city like Tokyo, and
I imagine Osaka and elsewhere, the better agents know in depth
which land is for sale or will be coming on to the market in the
next few months. Such knowledge allows you to focus on
a favored locale, then keep working the agent until he/she
comes up with something that meets your needs. It could be
that a family is considering selling part of their holdings, but
just hasn’t got around to it yet, or an aged relation is about to
pass-away, and thus the family home will have to be put up for
sale so the kids can meet their death duties obligation.

In principal, agents in Japan earn 6% on a real estate transaction,
3% from the seller and 3% from the buyer. In fact, recently in
downtown Tokyo anyway, real estate development companies are
aggressively and speculatively buying up any land that becomes
available and becoming the only sellers in the market. Apparently
in their race to make a buck, they are becoming less willing to pay
the seller commission. The impact on the realtors is becoming
noticeable - in particular, they now want to focus on more expensive
property, so as to make their traditional income. That means
if you want to buy somewhere cheaper, you’ll either be dealing
directly with a developer, or a small local realtor in a dingy office
located a couple of blocks from the station.

Finding a real estate agent to look after you is as simple as calling
them or walking in off the street. Recently agents have become
aware that there are foreign REITs behind some of the price boom
going on in inner Tokyo, and they are treating foreign customers
a lot better than they did. Pick a larger agent with a chain of stores
or a major website, and you’ll be in good hands. In a recent house
search myself, both my wife and I did our own contacting of agents.
She used the web (more about where to look next week), while
I focused on areas I liked and actually visited them, then found
a major Real Estate agent chain nearby.

The difference in experiences was quite interesting. One of the first
places I visited was Century 21 Open House center in Shibuya.
I was invited to sit down, fill out a form (in Japanese, although they
offered to have someone help if I needed it), do an interview, then
look through their files for interesting properties. To be honest,
it’s pretty hard to tell what a certain piece of land looks like from
Japanese agents’ data, because usually you get a little hand-drawn
diagram showing in black and white the layout of the property,
the width of the entrance and road, and notes about pluses and
minuses of the location. No photos, and no idea of what the
neighborhood is actually like. This was the major reason I decided
to go personally to areas that interested me. With pre-built houses,
things are a little better, in that about 50% of the time you will
actually get an external photo, but few internal ones.

Anyway, having given them a price, Century 21 Open House folks
brought out a huge stack of property plans. What you will soon
find out is that almost every property to hit the market is listed
with just about every agent covering that area. My understanding
is that there are sole agency arrangements but are few and
far between. Instead, one agent will be the primary contact,
they try for a few weeks to sell by themselves, then start
listing the property through other agents with bigger sales
networks. Thus, going to more than 2-3 agents to cover
a particular area is probably a waste of time.

Terrie Lloyd
...Investor in Training/

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Team Tokyo Forex Weekly
October 13th - October 18th, 2005

Ode to the US Dollar.

Well you have to hand it to Uncle Sam, he has endured what
seems to be the unendurable. It is amazing what has taken place
in the US over the past few weeks and months and the dollar just
keeps bouncing back.

Hurricanes on the Florida Coast, flooding in NY State, raging bush
fires in California ,riots in Toledo and massive pythons and an African
Lizard outbreak in Miami, not to forget the State of Oregan's more
adventurous decision to make public sex acts legal as part of the
constitutional right of 'Freedom of opinion'.

Speaking of opinion, Iraq is poised to have it's first constitutional

After voting took place last weekend and the surprise turn around of
the support from Sunni groups made a spectacular show of
confidence in the war against terrorism.

I am not one to deviate but International public opinion and local
opinion of the US is at a major low at the moment. Taking all of
these events into account you would wonder how the US is surviving
and showing such great strength in the market place.

A while back when Bush was up for re-election I was traveling
through Tokyo and touched down in a Gaijin (Foreigners) House,
a place where foreigners can stay for a period of time in an
environment half way between a back packers Hostel and a Hotel.
They are very convenient if you have long stays in Tokyo and don't
like going at it alone.

Again I am not one to deviate but I was staying in this House with
2 Democrats and a couple of other Europeans and I would quietly
avoid the political arguments that went late into the night at times.

The reason why? Well, mostly because even though I did not like
the idea of a potential world war, I do believe that some amount of
necessary force is required to help people experience freedom and
give them options that allow them to express their opinions freely
(I am a closet Democrat with tendencies to be more of a Republican).

How we achieve this process is sometimes questionable and often
riddled with mis-management but experience is a teacher and
perhaps we can extend Democracy through out the world in
a safer more passive process if individuals continue to exercise
their right to freedom and boost the economy by opening a Trading
account thus giving more financial support to the Democratic

We don't just trade and make money, we trade to ensure our
Democratic rights are safe guarded. (The Editor)

Despite the weakness of Friday’s data, the US dollar is starting
the week off on a strong note, trading higher against all the major
currency pairs except for the Canadian dollar, which has managed
to regain ground against the greenback following last week’s late

The main attraction of the day will be Fed Chairman Greenspan’s
speech on energy which is scheduled to begin this evening at
9:30 pm. Prior to that, however, Philadelphia Fed President
Santomero will be speaking about monetary policy at 4:30 pm.

The dollar is rallying across amid mostly technical buying, taking
the euro to 10 week highs around the $1.1880s, while hovering at
2-year highs against the yen at 115.96.Stop loss triggers cascading
through the 115.50-115.80s amid falling JGB yields. Markets will
scrutinize today’s batch of Fed speakers which should reflect the
impact from Hurricanes Rita and Katrina. As we mentioned earlier,
observers will want to scrutinize whether the Fed speakers will
introduce any concerns about slowing growth rather than the usual
talk of inflation.

But the market will also keep its eye on the September housing
starts/permits to survey the extent of the cooling in the housing
market. We have seen how Mortgage applications have edged
lower over the past 4 weeks, which could prompt some new
positioning in the bond market as far as Fed moves are
concerned according to Forex News.com

Click here to view the break down of the Forex Currency
Top Pairs Performance for this year to date

Team Tokyo Forex Chart
USDJPY 18:00pm Tokyo time August 19 2005

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Team Tokyo Forex. Tokyo's best kept secret.

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ICA Event
October 20th, 2005

Presenter - Gary Blankenship, Technical Director in Japan for Foundry
Topic ------- The Next Generation of Internet Protocol - Opportunities
and Challenges for Enterprises in Japan

RSVP: Complete event details at http://www.icajapan.jp/
Date: Thursday, October 20, 2005
Time: 6:30 Doors open, sit down dinner included
Cost: 3,000 yen (members), 5,500 yen (non-members),

Open to all - Location is Foreign Correspondents'
Club: http://www.fccj.or.jp/static/aboutus/map.php

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Edited by Burritt Sabin (editors2@japaninc.com)

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