Wednesday, October 16, 2013

Adventures in the Real Estate Trade

Some of you regular readers will recall that the original purpose of this blog was to document our adventures in the Japanese housing market. I will admit to being much remiss on this front. So to make up for this negligence here's the story so far..... After deciding that we did not want to live full time in Japan, Shizuka's instinct was to sell the house. I was more in favour of renting it out but the thought of a quick profit is always enticing so I went along with it.

We had talked to a local agent in Kameoka around the time we finished the renovation project. He was a very quiet unassuming fellow and we sort of wrote him off as being not so interested in marketing our house. Once back in NZ Shizuka did some research and found an agent in Nantan. Our salesperson took some good photo's and had some enquiries but none of them really lead anywhere. She called when I was in Japan with news that she had a customer who wanted to see the house. This was the day after the Typhoon/tree falling incident and Shizuka told her not to bring him as the place was a mess of broken trees, broken roof and broken car. She decided to ignore that advice and proceeded with her viewing. The results were entirely predictable with the customer taking one look and running for the hills. As the months went on she seemed to lose interest and once the sole agency agreement expired we decided to find someone else. 

Next up we contacted Century 21 in Kyoto and were assigned a super enthusiastic sales guy. He quickly had some ads done and before long he came to us with an offer from an interested buyer. The offer was conditional on the buyer obtaining finance which we figured should not be a problem. Done deal. Or so we thought... What happened next was yet another lesson in how frustratingly senseless and inflexible the bureaucracy in this country can be. Here is our understanding of what ensued. 

The potential buyer was a widow who lived locally in a rented house. She had been given notice by her landlord and had to find somewhere to live quickly. Her son was a policeman and had agreed to help her buy a house by becoming a co borrower with her. They had seen the add for our house, contacted the agent, arranged a viewing, then a second viewing and had put the offer in. Next the agent had the contract drawn up and everything was a go. The buyers then dropped the bombshell that they had no money and would be seeking a 100% mortgage from a bank. At that point both the agent and ourselves thought that this was not necessarily a show stopper, after all, Y5,000,000 isn't exactly a lot of money. The son has a good job, good credit history and has no dependants so has some chance of pulling this off. A week went by. Then news that they had been approved by the bank and that there were just a few formalities to be observed around the usual paperwork that plagues the average Joe in this land. The buyer had to supply his Koseki (Family register certificate) to prove his relationship to his mother and his Juminhyo (certificate of residence) to prove he actually does exist and has a place of residence along with proof of income and the other various things that one needs to obtain a mortgage. And this is the point where we depart from reality, or at least my version of it. The policeman's Juminhyo had his registered address as his police barracks. Apparently some cops live in accommodation supplied by the police department. This address was in Shiga Prefecture. Our house is in Kyoto Prefecture...right next to Shiga. The bank refused to advance the money unless he changed his registered address to the house he was about to buy. The principle being that if you want to borrow money for a house you have to live in it. The cop didn't think that was a problem... who's going to know if he actually stays there and as long as he pays the mortgage who really cares? Well it turns out that his employer cares. When he approached his boss at the Shiga Police for permission to change his residence to Kyoto he was told bluntly that in Japan, a cop (or a junior one at any rate) must reside in the same prefecture that he is employed by. And just like that, our deal was dead in the water. The widow was gutted, the cop, bewildered and the agent irate that these people had wasted so much of his time. The cop asked for some time to try a finance company but the agent told us that the only kind of lender that would finance him was exactly the kind that police  were expressly forbidden from having dealings with.

 I could not believe that A) the bank could be so inflexible, B) the agent had not qualified the asked them how they were going to pay for the house, BEFORE he went through the whole process and C) the buyer's embarked on their search and signed a contract without having first talked to their bank.
This last one, I was about to find out is exactly what everybody here does. Where I come from people look at adds for property, talk to some agents, maybe go to some open homes but before anybody signs any contracts they talk to their bank and find out whether they can actually follow through. 

Anyway.....Century 21 man soon has another potential buyer for us. This guy tells us he wants to buy the house, puts in his offer which we reject and then proceeds to negotiate hard. Back and forth we go for a few days until we reach an agreement. He then informs us that before he will proceed he wants to check that the street can get high speed internet coverage and that it's in the right school zone for his kids.  As usual it's ass backwards from the Western norms I am used to. Why the fuck would you not do all this before you start making offers? So I wasn't really surprised when he pulled out of the deal because, yep, it's too far from his kids' school of choice.

After that our sales guy seemed to wane. . around that time he was the one involved in the great agent - builder face off. He had been sending us weekly reports on enquiries but these became fewer and farther between and suddenly stopped. A call to his office yielded the helpful revelation that he had left suddenly due to an unspecified illness....reading between the lines we got the impression that the illness was of the mental variety. His replacement left us in no doubt that he was not in the least bit interested in inheriting our account.

We had taken out an add on a website where owners advertised their own properties. It is becoming more popular to do this in NZ but Japan is a bit behind in this trend. We got one hit from a man from Tokyo. He was retiring soon and was looking for a place in the countryside. He had looked at the photos and decided that it was exactly what he wanted and wanted to send us the money straight away. By now we have become pretty cynical about Japanese house buyers and told him that we would not enter any arrangements until he had got all his ducks in a row. We arranged for him to come and see the house while I was there but he postponed the day before and did not come to see the house until after I had flown back to NZ. It seems the day he arrived it was raining and that he was alarmed at the fact that one of the gutters was leaking onto the ground due to a twisted bracket. This he deemed to be a huge problem and consequentley he would not buy the house. We did not even bother to point out to him that a new bracket would cost about Y100 and take all of 5 minsutes to fit. Reason and logic has no place in the mind of the typical Japanesehome buyer.

So, while in Kameoka in summer 2012 I went to see the Agent we had talked to first. His quiet, understated way had put us off before but I figured that it was worth a try. The bigger agencies had shown us that they weren't interested in the more challenging cheaper properties so I thought that a small local agency might be a better bet. He suggested that renting the house might be a better outcome for us and I quickly came to the same conclusion. He explained to me that Japanese people just don't have the experience that westerners have with property. Most of them will only ever buy one house in their lives...usually a new one from a development company. They just don't know how to go about the process hence the time consuming, ridiculous, back to front way most of them approach it. That made some sense to me. I told him to go ahead and try to find someone to rent the house. Within 2 months I was back in Japan preparing the house for the tenant he had signed up for a 2 year lease.

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