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7 Steps to Buy a House in Japan.

In the previous post, we were describing the list of necessary documents for property purchase in Japan.

Today, we want to share with you the whole process of buying a house in Japan.

The process might take some time and effort. However, it is worthwhile because, eventually, you will get a chance to own a property in Japan rather than paying a wasteful rental fee.

Indeed, there are some initial steps like house and real estate agency search and communication between client and real estate agent. Because good apartments are sold very quickly, it is very likely that you will need to perform document collection and property search at the same time.

It is better to get an idea of the whole process and the core documents list in advance. Therefore, we thought it would be a good idea to provide an example of property purchase process flow as it is in the Japan Properties Co., Ltd. (JP hereafter)

Here are the main steps that you need to follow to buy a property in Japan:

  • Collecting the Core Documents
  • Contacting Banks
  • Filling the Loan Application Documents
  • On the Waiting List
  • Conditional Contract with The Property Owner
  • Loan Agreement
  • Closing the Deal


Step 1.  Collecting the Core Documents.

While you are searching for which apartment or condo you are willing to purchase, you need to continue gathering necessary documents.

In the previous post, we have listed the primary documents required to buy a property in Japan.

It might take some time to prepare all of them, especially the ones that you need to get from your employer. If you can smoothly continue with this process, it will be helpful not only for the real estate agent but yourself as well.


Step 2. Contacting Banks.

The collected documents will help the bank to decide whether you are eligible or not and the amount of loan you can get. A mortgage loan amount can vary from bank to bank. Therefore JP’s real estate agents always check the updated loan details.

After gathering the core documents, you submit them to the JP real estate agent, who in turn sends them to the bank to that can come up with the best mortgage loan option.

Luckily, it does not take much time for banks to review the documents and come up with an offer. The JP real estate agent ordinary gets a response within two to three days after making the inquiry.

Right after getting a response from the bank, the real estate agent introduces it to the client. If the client is satisfied with the terms of the deal, then they will proceed to the next step.


Step 3. Filing the Loan Application Documents.

This step is essential and requires basic Japanese language knowledge. All the documents will be in Japanese and banks want to make sure that client understands the terms and conditions of the mortgage loan. Therefore, it is better to have a bilingual real estate agent who can assist you with any issue.

At this step, the bank will check your IDs, personal information, income, etc.


Step 4. On the Waiting List.

Sometimes, during the submission of documents or a loan application people tend to make mistakes or miss essential information. In this case, the waiting process will take longer because banks send back papers asking to make corrections.

If everything is OK with the documents, it usually takes about one week to get an official mortgage loan offer from the bank.

At the same time, real estate agent keeps the property owner informed about the whole process. Unfortunately, there is a risk of losing a good apartment/condo to another client.

Owner of the property is not obliged to withdraw it from the availability list until the conditional contract is signed. The owner is free to choose the best deal for himself. Thus, if there will be another client with a better offer or who can pay with cash, the chances that owner will give his preference to that person are very high.

If a thing like this happens to you, there is no need to panic.

The JP real estate agent will come up with other property options, while the bank will continue the application assessment process.

Bank can give you a couple of weeks to come up with another property option. Hence, you do not need to start the whole loan application process all over again.


Step 5. Conditional Contract with the Property Owner.

You have finally found your dream house. All the documents checked and bank`s loan offer seems promising.

Thus, it is time for the next step – signing the conditional contract with the property owner. 

Within a week of getting a mortgage loan offer, you will proceed to sign a contract. Typically, there must be four people during the contract signing:

  • From the buyer`s side – client and the real estate agent.
  • From the seller`s side – owner and his agent.

Two documents need to be signed on this day.

The first one is “重要事項説明書” – Explanatory Paper concerning important matters – a legally required document. It contains essential information that is necessary to be explained to the buyer. The following is the example of this document:


The second one is “売買契約書” – “Purchase and Sales Agreement.” It is the primary contract between seller and buyer setting out the object of sale and basic terms & conditions. It must contain all details like the location, size of the object, which both sides agree with. The copy of the signed document is sent to the bank as a confirmation of the satisfactory agreement.

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At this step,  it is necessary to pay the Deposit Money – the sign of commitment, about 5-10% of the Property Price. In other words, in case if you cancel the contract unexpectedly without any reason, then the owner keeps the deposit money.

However, in case if seller`s side cancels the contract without a valid reason then a doubled Deposit Money amount will be refunded due to an unexpected cancellation.

Japanese people call it “倍返し”, which literally means “doubled refund”. 


Step 6. Loan Approval.

Three weeks after signing the conditional contract with the seller’s side, next comes the mortgage loan agreement.

This time you need to sign the contract with the bank – the agreement between the borrower and the lender. There will be client and real estate agent and bank`s representatives.


Step 7. Closing the Deal.

About one week after settling matters with the bank`s representatives, it is time for the final step of property purchase.

Total of five people are necessary to present on the final settlement day:

  • Two people from buyer`s team – the client and the real estate agent.
  • Two people from seller`s team – the owner and his representative.
  • Independent attorney – Judicial Scrivener (JS hereafter). This person assists in real estate and commercial registration procedures. Usually, it is the seller’s side who invites him.

During the final step, the JS checks the authenticity of the documents. After he ensures that all the necessary documents are brought in, he contacts the bank and informs them about the authenticity of the documents.

Soon after bank gets the confirmation from the JS, the whole mortgage loan amount is transferred to the buyer’s account. The client, in turn, moves money to the seller’s account. He also pays the service fee to the JS and the brokerage fee to the real estate agent, as well as settling expense adjustment.

Finally, after closing the deal, the client gets the house keys and move in immediately. Congratulations!

These will be all for the step by step property purchase in Japan.

In conclusion, we want to say that this is an example of the house buying process conducted in Japan Properties Co., Ltd.  It may differ depending on various aspects.

If you need any additional information, you can always contact us. We will be happy to assist you with the property purchase process.

We hope this information will be helpful for people who are involved or considering moving to a new place.

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