Buying a home

[Raphael1974]

I Have lived in Japan for almost nine years now. Japanese wife and two kids. I think it's about time I got I to a house. Any Ideas and comments?

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[larabell]

PR visa? Technically, you don't need it to buy property but, assuming you're not paying cash, lenders won't talk to you without a PR stamp. Of course, if your wife has enough income to qualify for a loan on her own, you could go that way too but I'd be willing to bet the lenders would still prefer you be a permanent resident.

I found the loan application process to be amazingly smooth. My realtor suggested we apply to three different banks, just in case. Of those, two came through with a 'yes' and it was just a matter of figuring out which had the better deal.

We went with a variable rate loan. The rates are usually quoted as a percentage discount off some standard rate (the Japanese equivalent of the US prime rate) so the larger the quoted number, the better the deal. That confused me at first so, if in doubt, have your realtor explain the terms.

Rates are super low now. Our annual interest is less than 1%. And for the first 10 years you can get a credit against your taxes equal to 1% of the loan balance at the end of the year so in my case the loan is basically free. Of course, I'm also taking the risk that interest rates will go through the ceiling at some point but... they've been essentially flat since the collapse of the economic bubble a couple decades back so it's probably not a huge risk. Besides, if the economy collapsed and interest rates shot up, I'd probably have more problems than just the loan payment ...

The biggest hassle is finding a place you like, obviously. Realtors will show you places without you signing anything so I'd suggest going to a few different ones in areas you like. There's a sort-of "multiple listing" service here but it's not terribly organized and most small realtors just push their own listings or let you paw through the stacks of paper listings they get from other realtors -- I don't recall ever being shown anything on a computer even once.

[Raphael1974]

Wow, thank you for the info so the first thing I should do is talk to a realtor? What about the taxes?

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[larabell]

Originally Posted by Raphael1974

Wow, thank you for the info so the first thing I should do is talk to a realtor?

You'll need to talk to a realtor anyway. The laws here are too complex for the layman to navigate (which is pretty much the case in the States, too, if you're buying real property). You should probably talk to more than one but you can start by visiting one near you and thumbing through the listings to get an idea what's available for how much.

If your Japanese is up to it, you might want to drop by alone the first time. If the realtor is stand-offish about showing listings to a non-Japanese, walk out. There is no shortage of realtors in Japan. You should be able to find one that is willing to work with you despite your not being Japanese.

What about the taxes?

Property taxes? Not much -- at least in my area. We bought our place for just over a half-oku yen and the property taxes are only around 150k yen per year. Just after your sale closes, the property tax guy comes by, asks questions about the house, and explains how the system works. They assess the worth of your home. Part of the tax is on the land and that depends on the size of the lot and the neighborhood. Another part is on the building itself and that depends on the age, quality of construction, and ammenities. If you buy a newly-built home and plan to live in it yourself, there's a huge discount in the home portion of the tax. But the actual rates will vary according to your area.

All told, we've got about 20% more living space than the apartment we moved out of and the annual expense, including property tax, is about the same as when we were renting. Plus we're building equity for the future. If you can qualify for the loan, it's definitely a good time to buy.

[Raphael1974]

Outstanding : ). You have been very informative .

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