Buying house in Japan

[michaelthiessen]

Hey all, was looking for a Japan real estate sub but I think this is the closest (*also posted on /movingtojapan) I’m gonna get so let me ask -

Currently living in the US with solid plans to move to Japan. Want to buy a house ahead of time in my favorite little town in Saitama ()

Questions are-
Are house prices negotiable? (Sorry sounds like a stupid question even to me but I’ve never dealt with real estate in Japan, in the US price its negotiable)

If so, are sellers more inclined to lower their price if paying in cash? (Or does that even matter since either way they’d be getting money upfront from the bank doing the loan)

Are broker fees negotiable?

Is there any reason to get a shorter term loan than the 35 year? Is there a preferred term length to get the lowest interest rate? I’ve looked around and it seems like there’s no prepayment penalty so I’d take the lowest rate I can get regardless of length. Unless I can get a better deal for cash.

If getting a loan, was thinking about getting the house in my girlfriends (soon to be wife) name so if we’re getting a loan she can use the 0.7% tax write off. I’m currently and have been working in the US forever so no permanent residency/bank acct/mynumber/etc yet. Can/should I put my name on the title? As a partner or something? Or does it matter? (Trust issues aside lol)

What do banks look for when approving / denying loans? It’s not like the US with credit history right? Do they look at your savings? Wondering if I should move a bunch of money into her bank account before her applying for a loan

Sorry and thank you for my long winded message. I apologize if there is a better place to post this, if there is I’d appreciate someone letting me know

Domo!

adding that gf/soon to be wife is a Japanese citizen. Born and living in Japan all her life. Working at a salary job for past decade+

and thank you all for your replies! Very helpful. Love Reddit for stuff like this. Google just doesn’t cut it sometimes

 

[keshigz]

@michaelthiessen Have you lived in Japan before and does it suit your lifestyle? If not, I strongly suggest to rent first, before buying.

If you are foreigner applying for bank loans, the banks would want to have your wife as the guarantor and obviously look at your finance as well. You will need proof of funds or bank statement from your US banks. You can also give them your US credit report.

Although you get better rates with short term loan, I recommend looking at flat 35. You can write off some portion of the loan during tax season. You do not need a permanent residency status to put your name on the title.

 

[vicomte13]

@keshigz It’s interesting… he says he’s been working in the US “forever” and his fiance has lived in Japan “her entire life”. Hopefully they met at some point!

 

[michaelthiessen]

@vicomte13 I took few years off work to fuck around several years back, lived in Japan for a while, met her back then so been dating for years but I went back to work. So long distance relationship for now. Gonna make some more US money then retire in Japan pretty soon.

 

[jdcastro1972]

@keshigz does "flat 35" mean flat rate 35 year mortgage?

 

[keshigz]

@jdcastro1972 Yes, flat rate 35 year mortgage.

 

[spacecadet3767]

@michaelthiessen The broker price is definitely negotiable if you’re purchasing an expensive property. I was able to negotiate it down 1% instead of the usual 3%. For house price just don’t lowball.

 

[rojer]

@michaelthiessen My apartment room is on sale (not in Saitama) so I can answer your first two questions.

The price is negotiable depending on the seller’s situation. The seller wants to sell it ASAP and you pay by cash, or, you or an inspector you hired found defects, things like that.

From a seller's perspective, if a buyer gets rejected by a bank for the loan, the contract is gone without penalty which is the biggest risk from the seller. So paying by cash is always welcome. Also holding period between the contract and settlement(usually 1 to 3 months) can be shorter which is great.

 

[michaelthiessen]

@rojer Right on. Thanks for the info!

 

[wlc777]

@michaelthiessen

Questions are- Are house prices negotiable?

Yes if you have a reason for it and not for the sake of lowballing. Visit the place, understand the prices in the area, and if there are enough downsides (e.g. extra renovation needed, no parking space etc...) then you can negotiate a bit. If you lowball "just for trying" you might lose out of a good deal and trust with the parties involved

Are broker fees negotiable?

No and it's insulting to the real estate agent, as you are using his services and asking if you can pay him/her less.

Is there any reason to get a shorter term loan than the 35 year?

Up to you, each bank has different rates and plans. If you have a good visa, work for a reputable company and have a good salary, you have higher chances of getting longer loan. Or some people just don't like debt and prefers to pay quicker...

If getting a loan, was thinking about getting the house in my girlfriends

Up to you, if you feel comfortable paying for a house that legally don't belongs to you. It's not straightforward to just "put your name", neither for her to have full ownership using your money. You will have to research more on this and use some support from an expert

What do banks look for when approving / denying loans?

Visa, job, salary, reputation of the company you work for, length you've stayed in Japan. They care more if you have a stable salary (even if relatively low), rather than having a lot of money in your saving account but without a stable position.

 

[albinoguitman]

@wlc777

Are broker fees negotiable?

No and it's insulting to the real estate agent, as you are using his services and asking if you can pay him/her less.

This is just not true, again as you said if you have a reason you can negotiate and I've heard of multiple valid cases. Two valid reasons (for different negotiation points) might be that you found the house yourself (small negotiation) and/or that you go with the agent that is already the other party agent, so they are getting their commission on that side (stronger negotiation power).

Another point is if it's high price, where you can also negotiate it down.

I've also heard of harder negotiation tactics, like someone who was never told the price of the real estate agent, and when he was going to sign he was told the fee was 3%. He said he didn't like that and would only pay 1%, and the agent ended up accepting it since all their work was already done (but I doubt they ever worked together again).

PS, a point against you and why I have never negotiated down might be lack of Japanese and/or cultural awareness, making them do a bunch of extra work and be more reticent to negotiate.

 

[ben95]

@albinoguitman my biggest regret is not knowing better to push back on realtor fees. they are absolute leeches and don't do any significant work and still get a huge amount of money just because they insert themselves as a middleman. blergh

 

[killuminati17]

@ben95 Good realtors are worth the fee when/if the person you are buying from/selling to is less than honest.

 

[ranked]

@albinoguitman Smart agent will sign a contract with you first, like mine, they required me to sign and agree on the agency fee first (yes we can negotiate at that point) before doing anything.

 

[xegugo]

@ranked Even with a contract it is still negotiable. There isn't a lot of things that aren't negotiable in this world, you just need legitimate reasons to begin that discussion.

 

[ranked]

@xegugo I didn't say not negotiable, what I said was "agent negotiate with you before doing anything", but not wait until everything settled to allow customer to bargain at that time.

 

[ginger18]

@wlc777

No and it's insulting to the real estate agent, as you are using his services and asking if you can pay him/her less.

fees are not fixed. and he won't have to do 10 times more work just because the asking price of the property is 10 times higher than another property

Japan's 3% fees are also quite high compared to many other countries

 

[michaelthiessen]

@wlc777 All great points, thank you!

As for the last question- the presumed loan would be in gf/wifes name. she’s a Japanese citizen born, living, working in Japan so was wondering for HER to get approved for a loan what I can /should do to raise the odds (ie put money in her bank account to show a bunch of savings)

 

[peace608]

@michaelthiessen You'll have to be careful about this because anything over ¥1.1M will be eligible for inheritance tax (贈与税). That goes for after the loan as well; if your name isn't on the loan then you aren't allowed to contribute to it.

 

[ginger18]

@michaelthiessen if you put money in her bank account she will have to pay gift tax on that (for the amount above 1.1M yen)