Tuesday, November 19, 2013

Expanding the Empire

I've always had this desire...I have mentioned it before to some of those who know me, to buy a house with a big bag of cash. Imagine this. You see a property with a for sale sign hanging outside. So you take a stroll around the garden and then wander inside for a bit of a poke around. All looks OK so you say "I'll take it".You then whip out the aforementioned bag of cash (In my fantasy it's a black briefcase) and you say to the owner "here's the money, now get your shit out of here". Wouldn't that be soooo cool?. Like, who does that? Only billionaires and gangsters probably. Well I can now say that I have achieved this goal albeit in a somewhat different way than I had pictured it would go. Well this is Japan after all.

Buying a house has always seemed to me to be one of those unnecessarily complicated things. On one hand you've got a vendor who presumably wants to sell his place. On the other theres a willing buyer who has the money/finance approved. So why does it take so long to wrap up a deal? I realise we're not taking about buying some chewing gum here but seriously, whats  up with all the bullshit? Like, why do people need to involve lawyers? All these delayed settlements and conditional deals going unconditional and other assorted paper shuffling. In Auckland it's all the rage now to sign a contract  making the sale of your house conditional on you being able to find another house that you like and can afford. It's ridiculous. You can buy a car and just a few minutes later be driving off in it. Why not with a house?  Cars have the same issues as property ie, loans, mortgages, and paperwork for title. Car finance companies can have you approved and signed up in very short order and title searches and changes can be done over the counter at your local registration office. Security interests on vehicles get transferred and cleared quick smart. I just can't understand all the performance that goes with buying a house. 

Whatever. Back to the story. In April I went to Kameoka to look at a house that was a court foreclosure and was nearby the first house. I called in on our estate agent and asked his opinion on it. I duly put in my bid but it was too low so I didn't get it. In July Mr H sent an email saying he had a couple of listings that might interest us. So Shizuka and I travelled to Japan in August to have a look at what he had. The first one was very cheap but needed a lot of work. The backstory on this place was that an old couple had lived there. The husband had died a couple of years back and his wife went off to live with her family. In typical Japanese fashion they had simply closed the place up and walked away from it. The family had studiously ignored its existence for the next 2 years until some lawyer got involved and told them to sell it so he could sign off on the estate paperwork. The house was full of junk and needed a full renovation on the inside. While tempted to take it on, I just don't have the time right now.

House no.2 was even more interesting. According to Mr. H it was a holiday home for some guy in Yokohama and hadn't been used very much in the last few years. It was very clean and tidy and best of all had no junk to get rid off. Even the garden was tidy. Nice street, great views and a good price. It took me about 10 minutes to make a decision. Over lunch we told Mr H to hit them with an offer. We had our answer within a hour...we were on. Great. "When do we get the key?" I asked. "Ummm, well....ahhhh. this guy has to clear his mortgage and he's waiting on some money to come to him, so, probably one month or so, maybe". So even though I'm a cashed up red hot buyer and this house is empty and has a seller that wants off it as soon as, we've still got to go through the usual rigmarole and foot dragging that any ordinary Joe Blow has to. I wasn't too disappointed though...at that point I didn't know how close this thing would get to my aforementioned bag of cash scenario.

The one month turned into 6 weeks so it wasn't until late September that we travelled back to Japan. The deal was scheduled to go down on Monday in Kyoto. We arranged to go to Mr H's office first were we signed our end of the sale agreement. On our way there we stopped off at the house to make sure that it was still there and in one piece. We found that in the intervening 6 weeks the weeds had flourished, some bees had established a home in the garden and that most irritatingly, some tosser had dumped a rusty old bicycle and a huge old computer printer and screen behind the house. The whole rubbish thing in this country does my head in. All the nonsensical "recycling" rules and regulations are an abject failure and a complete waste of time. This is evidenced by the fact that rural Japan is one giant rubbish dump of junked equipment and machinery. I can honestly say that one of the main reasons that I would not contemplate living in Japan full time is the ludicrous, pointless time consuming charade that everybody there goes through on a daily basis just to get rid of your household trash. It makes me angry just thinking about it. Before the hoots of derision and exclamations of disbelief start, let me say this....It's always the little things that get to you. Like bread. And the chopsticks issue. And the legal system. 

Anyway...off we went to Kyoto. First stop was Mitsui Sumitomo bank were Shizuka has the account were we had sent the money to. I had imagined that we were there to arrange a transfer to the sellers lawyer's trust account and that it would then be transferred to the seller after the lawyer had clipped the ticket on the way through. Not so however. Mr H explained that as the seller has a mortgage that he needs to clear it's going to be quicker and easier for all parties if we pay him in cash. It took the appearance of several large bricks of Y10,000 bills to convince me that he wasnt joking. Now if you walked in to my  bank in Auckland and asked for enough money to pay for a house they A) just wouldnt have that amount of cash available at such short notice and B) would probably call the cops. Not so here. They didn't bat an eyelid. The bricks of cash went into Shizukas gaudy Hawaiian "carrying all my everyday crap around" bag. It was a far cry from the black leather attache case of my dreams but, it was indeed a bag of cash. 

Next we walked across the street to the UFJ bank and got in the elevator to the 3rd floor. There we met the seller Mr. M and the lawyer that would act for both parties. His name was Mr Big. I'm not kidding. That is actually his real name and I have his business card to prove it. We all went into a small conference room that was freezing cold. This place seriously was like a fridge. A quick call had the bank staff scurrying around looking for the thermostat. That's another one of those little things I was talking about....the 25 degree difference between inside and out that you get in both summer and winter here is crazy.

Mr M was sitting across the table from me. He was clutching a small carry bag which was full of...you guessed it. Cash. Mr Big explained to us the Mr M has 3 mortgages on this property and that with our cash plus his cash these would all be cleared right now. So we all laid out our cash on the table. Next thing your know is that the lawyer and the estate agent are counting these stacks of Y10,000 bills. It looked like a drug deal was going down. I so much wanted to take a picture of it but guessed that was quite inappropriate given the seriousness that was being exhibited by everybody else. Mr M seemed a bit tense as the money was being counted. When the count was confirmed he took all the cash out to the bank officer who deposited in his account and gave him a printout which said he was free and clear of all his debt on the house. He then had to stamp the sale agreement with his Hanko and the lawyer had to check it's authenticity by placing a semitransparent piece of paper over the top of the stamp and rapidly flicking it back and forth several times. It was just as amusing to watch as it was pointless to do. Why you need to verify his stamp when you have just taken a copy of his drivers licence is beyond me. Traditional I guess.

Mr Big, who struck me as a bit of a nerd, asked Shizuka if NZ was close to Russia. Geographically and socially challenged it seems. He then presented us with his bill. It was quite reasonable but in typical fashion wasn't a round number. It was something like Y83,489. payable in cash of course. All we had was 10,000's. Yep...we needed change. 
Mr Big went out to see the bank staff and came back with a handful of smaller bills and COINS! Now we are counting coins on the table of the conference room on the 3rd floor of the UFJ Bank as we buy a house. I could not believe it. And then Mr H hands us the bill for his commission which is something like Y112,833. Once again we are counting coins and everyone is digging into their pockets for the 3 Y1 coins we need to wrap this up. It would never occur to any of these people to say "Don't worry about the pocket change...just round it down". Not only did I just pay for a house with a big wad of cash it also involved loose change.

After it was all over Mr M seemed more relaxed. He handed me the key and I asked Shizuka to ask him about a couple of things I wanted to know about the house. It turned out that he speaks very good English and I was able to chat with him for a while. He told me that he had bought that house when it was new, about 20 yeas ago. He had lived in it for 7 years with his wife and kids before he had to transfer to Yokohama for his job. Since then he had not lived in the house at all. Yes...He had been paying his mortgage for 13 years and had not spent a single night in the house in all that time. He came down to Osaka regularly for work and would always visit the house to do maintenance and gardening but always stayed in a hotel as his company payed for it. He told me he had just received an early retirement payout from his company which allowed him to clear the mortgage, but he needs to continue working. Talking to him I was once again struck by the terrible cost of buying a new house at the peak of the bubble economy. That house had  literally cost him about NZ$400,000 and after 20 years of paying for it he was walking away with nothing. I felt really sorry for him right then. He was a very nice guy and didn't seem at all resentful of the situation. I wished him well for the future and I hope that fate is kinder to him in the next few years.

So just like that, we now own 2 houses in Japan. Mr H says he will find us a tenant so I'm looking forward to the day when I can collect some rent from that one as well. There's a number of things I have to do before that happens...we have to pay the city their exorbitant connection fee for the water system and the water heater is dead (just like the last one) but at least there isn't a mountain of junk and furniture and personal belongings to get rid off. 

Except for that fucking bicycle of course.

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