Thursday, February 18, 2010

Finding your little piece of land (Pt.1)

As both my wife and I are foreigners, access to real estate information and the purchase process is about 10 times harder to come by.

Some good places to start would be the following:
http://www.realestate-tokyo.com/sale/guide
http://www.housingjapan.com/real-estate-tokyo/buying-guide/

Much more entertaining:

http://www.dannychoo.com/post/en/515/Tokyo+Property+Purchase.html
Danny covers a lot of ground and is way more readable.

What's available and for how much (for the land)?
Below are some the sites I regularly search to get an idea of what's on the market.
Yes they are in Japanese and you will seriously need to ramp up your Japanese or heavily rely on your Japanese spouse/partner throughout the whole process of building your own home, coz that's really the only way to get the best deals.

http://www.athome.co.jp/
http://www.homes.co.jp/
http://realestate.yahoo.co.jp/

In my case, I find the best way to find a good agent is to go through friends or relatives that have had good experiences. You'd be surprised how many have built or done renovations. In our case, we've enlisted about 4 agents to turn over about every rock in Kichijoji. We've narrowed it down to 2 agents now and I think we're pretty close to making a bid on a place.

How much for the Agent?
The buyer pays all of the commission on the sale which is (as they will all tell you) 3% plus tax.
So hypothetically, that's 1.5M yen on a 50M yen property which is in my opinion a lot for basically presenting me with a list of about 12 plots of land and a few hours of paperwork. The kicker here is that there is no real incentive for the agent to lower the price as this effectively reduces the total commission he or she receives.

Negotiating the fees.
My suggestion here is to do your homework.
For example, if most people these days are buying, 25M yen homes (0.75M comm) and you're the outlier that is buying the 50M yen, there's a probably a deal to be struck in between.
Similarly, if you the real estate is part of a larger company that also builds home, that is another opportunity to strike a deal. Most Japanese I've heard don't really negotiate on the agent's fee so I've heard so it helps to be very tactful in this department.


Is this land good value?
As everything in Japan, ESID (Every situation is different) but it's slightly easier if you're just buying land as you don't need to assess the value of the building.

Below is a great site that gives the price per square meter of recent deals struck in the area.
It shows price trends going back to 15 years in the past. (I would hate to have bought land in the early 90s!!) and as early as 6 months back. For example, it appears that prices have dropped about 5~10% in the past year.
http://chika.m47.jp/

The next site gives you the assessment from the city for tax purposes.
This is more of reference as you can ascertain the prices fluctuation between 2-chome and 4-chome for example.
http://www.rosenka.nta.go.jp/main_h21/tokyo/tokyo/prices/city_frm.htm

Of course, this is just the beginning as other factors as proximity to railway, schools, parks, south facing, corner plot, etc play a factor into the overall price.

More to come...

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