Buying an apartment or a house in Japan can be quite difficult and to get help using a Buyer’s Agent that will represent your interests and help out during the process is a great way to smooth out the process.

The Japanese property market is very closely connected to the Stock Market and before the massive fall of the Stock Market in the 1980s prices property had been soaring high. When the market dropped investors quickly left the property market. Despite the current economic difficulties Japan is facing, investors are back and property prices in major cities remain high.

When looking at properties to buy not only is location important, you should also consider the building date. Buying new property can be very expensive however older properties can have their own share of problems which in the end could turn out to be very expensive not to say troublesome. Older apartments are usually not designed to fit today’s standard sizes which can make for trouble when buying furniture and also kitchen appliances such as refrigerators, lower amperage circuits and internet connections problems should be taken into account. More importantly one should consider that apartments 30 years or older are build before the newer construction regulations came into effect with its stricter terms of earthquake resistance in buildings.

As buying an apartment in Japan can be quite difficult it’s common to use a Buyer’s Agent that will assist during the process. Compensation is usually paid when the property purchase is completed and for more expensive property there is normally a commission calculated from the purchase price. Some of the documents you surely will come in contact with when buying an apartment is the following:

Offer/ letter of intent. A letter stating intention of buying the apartment. Be aware that the letter of intent is not legally binding for either the seller or the buyer in Japan. The seller could therefore be in contact with several different potential buyers. The final deal is sealed first when the purchased contract is accepted and signed by both parties. Purchase contract. The purchase contract will state all relevant information such as property information, closing date(date of title transfer) and legal considerations. After buying the apartment make sure to put aside money for renovations that you will be needing to do on a a regular basis. Buying an apartment also requires you to pay a one-time tax usually ranging between 6-8 percent of purchase price.

The Loan

To qualify for a mortgage foreigners living in Japan previously needed to show that they had lived in Japan for a number of years. However today there has been a loosening of the previously strict regulations. Still many banks require Permanent Resident status for loan applicants. Some general rules when applying is as below.

• Applicant 20-65 years old
• Annual income above 4 million yen
• Japanese co-signer if the annual income is below 4 million yen
• The applicant will reside in the property purchased
• Not a lease hold land

You might also find an interview GaijinPot carried out with IFG Asia Mortgages, which offers advice and assistance from initial application through to settlement.

Any more tips? If you have prior experience or information please add to it to the comments section.