Tag Archive: Buying a house in Japan

Sep 26

The Move

On September 19, we moved house.  We still haven’t said goodbye completely to the Kamiooka Rental House; we do that today when we go back to find out how much of our 180,000 yen deposit we get back.  But more on that in a later entry.

 

In the days before we moved, we told Tsukide-san from URBAN about the problems I wrote about earlier.  We got some of them fixed (the painting, more or less; the cut marks around the kitchen outlets, the holes in the side of the house), and some of them excused with a “sho ga nai” (a lot of the non-level issues has to do with the walls and floors not being quite level).

 

We were up all night on the 18th, finishing our packing.  We slept for about two hours, and then woke up an hour before the movers were due to arrive.  When they did, I hopped on my bike and cycled over to the Kamiooka Tea House to await the first load.

 

We were told that the house could be done in three loads and that they would be finished by 12:00.  In actuality, it took four loads (they called in an extra crew to help), and they weren’t finished until 16;15.  They didn’t charge us extra.

 

So, the house was filled with boxes, and we have spent the last week unpacking them.  I’ve done the bulk of it, and I’ve managed to whittle down the boxes to about ten or fifteen remaining, spread through the Tatami room upstairs and about seven still downstairs (a couple of those are empty: we’re using them to block off the part of the living room window that the curtain is too short to cover.

 

I cleaned out my office first: I desperately needed that set up so I could attend to the myriad of tasks I had fallen behind on (and couldn’t do comfortably on my tablet PC while sitting on a bunch of boxes).

 

The unpacking method has been this: pick a room, and take everything out of the boxes, putting everything in a temporary location at least.  Anything that doesn’t belong in that room then must get shifted to another room.  I used this method on my office, the kitchen, and I’ve almost finished the living room (the biggest problem there being the sheer amount of papers my wife has).

Jul 04

The Decision

So, I’m back from the first leg of my tour to Canada, and my wife has been busy while I’ve been gone. She’s hired SANWA to build the window grille to keep any kids from dropping out of our second floor window.  She’s hired a landscaping company to turn the garden at the Kamiooka Tea House into something manageable.  And she’s pretty much narrowed down the choices for renovators to two.

 

We dropped SANWA (except for that window thing) because we didn’t feel they understood our design ethic.  We dropped Sumitomo because their it-will-never-change-from-the-estimate fee was not negotiable (there were no details in the estimate that were changeable—not the type of doors, not the bath unit, etc.).

 

So we had a meeting today with the two remaining.

 

We met with CONCEPT at 13:30.  We’d actually tried to cancel them, but they were very keen on showing us what they had planned for us.  However, their price was steep, and while they managed to drop it by about 800,000 Yen, it was going to increase again with the structural changes they were suggesting.

Despite all we’d heard from Yokohama city and Sumitomo about balance being important, CONCEPT didn’t change their idea of reinforcing walls, seemingly willy-nilly.  The new plan was to tie the second floor and first floor together more strongly.  This wasn’t included in the quotation they gave us.

 

The thing about CONCEPT is this: if we didn’t have such an old crap house, we would totally go for them.  They understand us, plus they have a vision for each room, plus they think of stuff the other companies don’t (i.e. running conduit between the office and the second floor).  After he left, I’d pretty much decided that if URBAN didn’t have any significant improvements to their initial offering, that CONCEPT would be the way to go.

 

Unfortunately for CONCEPT, URBAN did.  While I’d been gone, they’d submitted a lowball quotation to my wife.  URBAN have expertise in Earthquake-related structural improvements, but the changes they’d suggested would not have significantly increased our survival chances, even by their own reckoning.

 

So they came in today with a quotation 1.2 million yen higher, but with changes that might actually save our asses in the event of a large Earthquake.

Earthquake_Fix_ZoomThe image on the left shows our unmodified house in a computer simulation of a quake.  The right hand side of the house basically folds up.  The new version, taking into account the improvements URBAN pitched us, is on the right.  As you can see, only the right-hand side of the second floor collapses in this version, BUT it doesn’t collapse completely and leaves some void space.  These changes have to do as much with balance as they do with strengthening walls.

 

Of course, these are computer simulations and can’t really do more than guess at what would happen during a real quake, since actual damage all depends on intensity, direction of shaking, and duration, but this is the closest anyone has come to giving us something concrete we can do to increase survivability.  All bets are off if the earth under the house gives way as well, but, as I say, we’ll take what steps we can to prevent things we can actually control.

 

So we’ve essentially made the decision to go with URBAN.  It’s a shame, because I’m not sure we’ll be able to get the extra little touches that CONCEPT had pitched:

 

– Conduit for LAN cable

– Little bedside lights build into the wall of the cubby we created for the head of the bed

– Custom bookshelf for the library room

– Ranma between the library and genkan

 

I’m still holding out hope that maybe we can convince them to do these little jobs.  But I’m not holding my breath.  There’s not a lot of money in it for them.

Jun 06

Kamiooka Death Trap

I’m sitting in the new house with my wife and a rep from Yokohama city, who is just completing his inspection of the house for an earthquake evaluation.

 

I am changing the name of this house from the Kamiooka Tea House to the Kamiooka Death Trap.  We didn’t pass a single part of the inspection.  The inspector suggested that if we were hit by an Earthquake the size of Kobe’s in 1995, the house would come down in about seven seconds.

 

On the plus side, we could collect the insurance.

 

On the minus side, there’s a good chance we’d be dead.

 

I think we’re going to re-prioritize what we’re spending our limited renovation money on.

 

As a side note: yes, you can get an inspection before you buy a house, but the owners need to sign off on it… and they never do.  I wonder why.

Jun 02

The Rose Rides Again

At the closing yesterday, Friendly informed us that the rose bush had been returned.

 

 

However, it is not in the condition depicted in the photo above.  As I wrote before, the neighbour across the street had taken it, and in the process had cut off all the branches, leaving only two thorny stems sticking out of the pot.

 

I felt a little guilty about it: I guess I showed too much reaction when I discovered it on the neighbour’s property (not much at all: I thought I’d pretended to be cool very well) and so Friendly and the other owners negotiated its return.  I had actually come to terms with losing it, and I really hope that its return doesn’t sour relations with said neighbours.  And of course, I’m not in a position to give it back, because after the trouble everyone’s gone through, that would be rude.

 

All of which puts me under immense pressure to nurse the bush back to its former glory with my less-than-adequate gardening skills.  The eyes of the neighbourhood and the former owners (did I mention that one of the brothers (Sleepy) lives just a few minutes away?)  Halp!

Jun 01

I Own A House Now

This morning my wife took the day off and we headed down to the bank for the settlement.  (I didn’t have to take a day off—one of the great advantages of working irregular hours out of the house.)

 

We stopped in at a Starbucks an hour before we were due and met with a fellow from the post office to sign our life insurance papers.  My wife chatted with him until about five to eleven, at which point we hurried across the street to the building that the bank is in.

 

As always, the owner was there early.  It was Friendly by himself.  Luckily for the bank, the other three (plus the woman, who we discovered was the wife of the youngest son, the one I called Sleepy, despite the fact that she sat across from him instead of beside him that day) weren’t there, so we were all able to cram into the tiny meeting room.

 

All told there were eight of us:

 

My wife

Myself

Hirasawa-san

A Japanese bank rep

The Lawyer/Scrivener (I think her name was Risa)

Hank

The seller’s agent and her cookie box

Friendly

 

I stamped a few documents with my jitsuin, filled out three transfer forms (one for each seller), and then we waited for the transfers to go through.  At one point, about ten minutes after Hank had supposedly started the transfers, the door cracked open and a bank employee stuck her head in.

 

“Should we send the money now?” she asked.

 

Only Hank, the lawyer, and myself caught what she said, and we had a good laugh after he confirmed that it was indeed for the purpose of sending the money that he had given her the money transfer forms.

 

Other humour: the seller’s agent once again dressed in designer clothes, brandished her Louis Vutton meishi holder… and had her blue cookie tin with all her items.

 

In the interest of curbing the length of these posts, I’ll bring this to a close.  Once the transfers went through, we paid the remaining fees:

  • Hirasawa-san’s remaining fee (we’d paid half at the contract signing)
  • The fee to the scrivener for her services registering the mortgage and building (actually, due to a .42 square meter increase in the size of the property when measured by the surveyors, the fee went up by 3000 Yen, but she discounted it back down for us)
  • The reimbursement for the registration of the second floor to Hirasawa-san/Mitsui Re-house, who had pre-paid the registration fee for the second floor in order to hurry it along

And then we all bowed and went our separate ways.

May 31

CONCEPT Returns

So yesterday, after our deflation from the Sumitomo visit on Saturday (after reading the online reviews of the company), we received CONCEPT again at the Kamiooka Tea House.

 

We took our rep (damned if I can remember his name—it’s Yoshikawa or something like that) upstairs to the tatami room and we all sat down at the low table we’d asked the owners to leave.  I cracked open a couple of shutters to let some daylight in, and he presented us with CONCEPT’s quotation.

 

Actually, it was two quotations, and five different designs for the first floor.

 

The main interesting features of the various plans were:

 

  • An extension where the south door off the kitchen is now, extending the house by about 2 square meters in order make the bathroom bigger (larger bathtub)
  • Reducing the depth of the closet in the office to make it more western-style
  • Living room (actually, we’re calling it a Library now) becomes a dining room
  • Wall between the hallway and Library removed.  Wooden crosspieces inserted as seen in the photo below with the middle opening covered by the kind of flap you see hanging outside of restaurants (if you’re reading this on facebook, you may have to refresh the page to see it: if that doesn’t work, click the link at the bottom of the note to view the original post at squeeze-box.ca).  This is to make the room feel bigger, and also just increase the amount of light.

2010-05-31 12.13.08

  • The west kitchen door (which is already unopenable and bolted to the floor) removed and replaced with a reinforced wall
  • Most of the interior walls covered with a reinforcing board of some sort.  This will strengthen the house against earthquakes, according to CONCEPT, but will completely cover the existing Japanese wood detailing.  However, it will be paintable, unlike most Japanese walls.
  • Removal of library closet and conversion to a bookshelf, possibly with a sliding piece
  • ALL the flooring on the first floor replaced with beautiful hardwood floors
  • All the new floors will be insulated
  • New unit bath
  • A ranma (a decorative wooden transom) between the living room and kitchen.
  • In one version, the kitchen was extended and the library was squished
  • A custom sink and cabinet unit for the “powder room” (the changing area between the kitchen and bath room) made out of beautiful wood
  • Bracket lights for the bed nook that we’ll create by removing the lower half of the bedroom closet.
  • Did you know that closet hangers cost 55,000 Yen!?!?!

The estimate was well over 5 million yen, which totally breaks our budget, given that it doesn’t include any work on the foundations or the exterior walls vis-a-vis earthquakes.  (Incidentally, CONCEPT’s opinion is that Yokohama City’s standards for the earthquake certificate are so high that we will never actually get it: meaning no 1.5 million yen money back from the local government to pay for structural improvements.)

 

The major expense was the wall work, which stung on two conflicting levels.  First, because we would rather not cover up the woodwork on the walls, and second, because we definitely need the structural improvements the wall work brings.

 

The other major expense was the flooring.  The flooring CONCEPT had picked out was a beautiful grey/brown hardwood.  (I spent much of my youth in a farmhouse that had flooring made of enormous wooden planks, and that really influences my aesthetic, I guess.).  But at 10,000 Yen per square meter, was really not as affordable was we’d have liked.  The cheaper options are not really wood, but plywood/pressboard.  We will probably have to compromise here and decide to use the good flooring only for certain rooms on the first floor.  (Actually, keeping some of the existing flooring might be an option, since the library floor is quite new.)

 

The extension at the back of the house to increase the size of the powder room / bath room is a great idea, and actually not that expensive.  But the quotation doesn’t include the registration of the extension, which will likely cost around 80,000, more than doubling the price of building it.  Also, the arrangement of the walls after the extension actually makes the kitchen smaller, which we don’t really want to do, since we want to fit our table and chairs in there.  Which is, sadly for my legs, more important than an extra large bathtub.

 

We can also save money by demolishing the office closet and sticking my desk in that corner (no hanger—55,000 yen less!).

 

With such fiddling around, we brought the estimate to under 5 million, which is not really enough, considering we’re anticipating no money back for either Eco Points or the earthquake certificate, and we want definitely want to reinforce foundations and possibly outside walls.

 

The double-glazing may just have to wait for another year.

 

We’ll try to meet with CONCEPT again before I need to leave for Canada and pass along our thoughts on their estimates.

May 31

A Saturday Morning with Sumitomo Fudosan

Sumitomo is the fourth (I think it’s the fourth) renovations company that we’ve shown the Kamiooka Tea House to.

Frankly, we weren’t expecting much, because Honda-san, the rep, had been phoning non-stop, but seemed incapable of using email.  When my wife finally got hold of him a week and a half ago by phone, she arranged an appointment for Saturday, May 29, and asked him to confirm by email.

 

When he hadn’t confirmed by mid-week, she sent an email saying that we would cancel unless we heard from him.  He faxed us that day, and solved part of the mystery.  Sumitomo’s IT department are apparently a bunch of idiots because the Sumitomo employees can receive email fine, but are having trouble sending.  Our new method of communicating with Honda-san is that we send an email, and he replies by fax.

 

Jesus, if I worked there, I’d probably create a Gmail account simply so I could communicate with my clients effectively.

 

In any case, when we met him we were pleasantly surprised: he seemed intelligent, experienced, and confident.  Like all the renovation companies except CONCEPT, he didn’t really understand what we were after, and wanted to make everything NEW NEW NEW!  Although he’s the only one who understood my idea of extending the balcony without my having to explain it: “Ah!  You want to sit out there and drink tea!”

 

Of all the renovation companies so far, Sumitomo was the one that seemed to know the most about earthquake renovations and also home maintenance.  He explained to us that due to the heavy Japanese tile roof (pictured below), we would have to probably put plates on the outside of the house in order to satisfy the requirements of Yokohama city’s earthquake certification authority.

Honda-san also took a look at the foundations and agreed that they likely needed to be reinforced.  He also discovered a cross beam that had been nibbled by termites.  The termites aren’t active right now, but the damage isn’t extensive, so it’s possible that there was a problem that has already been dealt with or the termites abandoned the site on their own.  We won’t know until summer, which is the season they become active.

 

Personally, I’m surprised that more Japanese houses don’t have termites.  Virtually all of the buildings built 20 or more years ago have wooden support struts sitting on or in blocks of concrete that are only 10 – 20 centimetres from the earth.  (Yes, Japanese wooden houses sit on top of the ground, above the concrete foundations in order to maintain airflow under the building and prevent rot in the humid climate.)  We’d counted on having to deal with termites, so the only surprise here is that no one else noticed that damaged beam.

 

Other things no one else had mentioned: the wood on the outside of the windows needs to be painted before it rots off (he suggested we do it ourselves to save money), and the iron platform and struts holding up the garden should likewise be painted to prevent rusting.

 

All in all, his ideas about the interior design were not so amazing, but he knew a lot about structural items and more than any of the other companies about PROCEDURES.  He told us that it would likely take six months to do all the work if we wanted earthquake certification and Eco Points.

 

A word on Eco Points: in April, the government of Japan instituted Eco Points to try to encourage homeowners to renovate instead of knocking down and rebuilding.  If you do certain types of renovations that are considered to have an ‘ecological’ benefit, like, say, replacing single-pane windows with double-glazing, then you get points back that you can use as money to buy other materials (for example: insulation).

 

We’d been asking all the companies that came through if we could replace the current windows with double glazing and then use the resultant points to do the floor insulation we’d planned.  They’d all seemed to think it was possible, but Honda-san told us that a) the points are not necessarily given out immediately, and b) the government will only give out 100,000,000 Eco Points for 2010 and may not renew the program in 2011.

 

He suggested it would be unlikely to work, and advised simply replacing the window frames on the larger downstairs windows for the moment.

 

Honda-san also noticed the drain from the upstairs plumbing running out the northwest corner of the house and pointed out that it was too long a run for the toilet drain.  I’m not sure what complications that could cause down the line, but it’s good to know.

 

By the time he left, my wife and I were very impressed.  Despite not having the creative flair of CONCEPT, Sumitomo Fudosan seemed to have lots of experience dealing with the structural elements of renovating an old house as well as the procedural elements of the same.   We were sitting in the Sobaya around the corner from the house discussing the possibility of splitting the job in two (interior design to CONCEPT, structural work to Sumitomo).  That was before my wife turned her iPhone on and started reading Sumitomo’s reviews on various renovation forums.

 

Wow.  The internet was chock-a-block full of complaints.  Not of the original renovations themselves, but apparently Sumitomo was absolute shit at after care.  There were reports of Sumitomo reps simply not returning phone calls or any form of communication; court cases; refusal to do warranteed repair work… you name it.

 

That really worried me.  There are great advantages to dealing with a big company, especially in Japan: they can frequently get cheaper materials, they have lots of experience with the paperwork involved, and tend to behave much more professionally.  We chose a big company (Mitsui Re-House) as our agent, and are very happy with them.

 

However, the drawbacks to dealing with a big company become apparent when you read reviews like the ones we saw online:

  • The sales rep will make promises in order to make the sale (to fill his quota).  The rep’s job is to make the client happy enough to sign on the dotted line.  That’s how he/she is rewarded.
  • Sumitomo will lock in their estimate/quotation, so whoever is project managing the build has the job of doing the work for as big a profit margin as possible.  The project manager’s job is to do the work as cheaply as possible.  That’s how he/she is rewarded.
  • If something goes wrong afterwards, it is not in the company’s interest to do any further work, even if the work is guaranteed.
  • Lawyers in Japan are very expensive, and damages paid from lawsuits are paltry, compared to North America.  A large company knows that it is not in the consumer’s interest to sue them.

So if a large company seems to be getting bad reviews from former clients (especially if, in this case, the proportion seems MUCH higher than other similarly-sized companies get), it probably makes sense to avoid them.

 

This was disappointing.

 

We’ll still let Sumitomo go to the house and do their inspection (they do a much more thorough house check, since their quotation is locked in) and put in their quotation, but we will approach them with extreme caution now.  (I’ll probably even ask my wife to talk to Honda-san about the company’s terrible reputation.)

May 29

Sunday last

Wow, I’ve already got another episode to write about from today, and I still haven’t written up Sunday from last week.

 

Sunday of last week we were supposed to be having two preliminary meetings at the Kamiooka Tea House with two new renovation companies.

 

We met the rep of the first company, SXL (‘S’ by ‘L’) at 10:30.  He walked in, took one look at the place, and said it would cost at least 6 million yen to fix, probably closer to 8, and then essentially walked out.  We were all very polite, but I was really pissed that he’d wasted our time.  We had three hours until the next company showed up.

 

When sending out the bid, my wife had specified that we were looking at spending around 3.5 million Yen and had given a fairly detailed description of the house.

 

We know that 3.5 million is unrealistic, considering all the extra work that’s been added to the job since the first quotation, but the other companies have all come in and given it their best shot.  If this twit knew he wasn’t going to be able to do this for even close to the amount we specified, he shouldn’t have even made the appointment.  (And no, there’s no way you can tell what structural things need to be done to the house just by looking at it.)

 

So, after that disappointment, we walked around the house, talking about what we’d like to do for 45 minutes or so, and then took off to try the nearby Chinese restaurant (the large, vertical sign of which is the closest we get to a view from the Tea House).  You can see just to the left of center in the photo below:

 

After eating lunch at the Chinese restaurant, and a pitstop at McDonald’s for my wife to get coffee, we headed back to the house to meet our second renovation company for the day.

 

This company was called CONCEPT, and two men showed up.  The first was a shaved-head unprepossessing sales guy/designer (Yamazaki-san).  The second was a short man in coveralls, the workman, who was crawling under the floor and inspecting things.  We later found out that this second man is actually the president of the the company!  (CONCEPT only has 15 employees)

 

The experience with CONCEPT was the opposite of what we’d had in the morning.  Yamazaki-san seemed genuinely interested in the house and our ideas for it, and was always prepared to jump in with ideas of his own.  Unlike all the other renovators we saw, he understood instantly that we didn’t want to turn the place into a new house and wanted to keep the character of the house.  He was also excited by the house, particularly the second floor (and my toaster and shaved ice machine that I’d rescued).  He made lots of really good suggestions that enhanced the ideas we’d had rather than compromising them.

 

Meanwhile, the company president was crawling around under the floor and checking the walls and posts with his lasers and such.  At one point he popped up from under the bedroom floor and said something to the effect of: “The foundations are surprisingly weak!”  On the plus side, we discovered that all the posts in the house are still straight, despite being originally designed to support only one floor.

 

Speaking of the posts, the president also told us that none of our internal walls are load bearing.  That sounds great: we can move them around however we want… until you realize that that means that only the corners of the house are supported by the posts.  In the event of a big earthquake: wobble, wobble, wobble, rock, rock, CRASH!  (Particularly since this house has the traditional heavy Japanese ceramic tile roof.)

 

But the experience of dealing with CONCEPT was the best so far.  It was really nice to talk to someone who actually approached the house like a designer, asking about a given room’s feeling and function rather than just what we wanted it to look like.  And, as I said before, he seemed really taken with the house and excited about working on it, which made us feel really good.

May 26

Saturday

We went to the Kamiooka Tea House on Saturday to meet with one of the renovation company reps who had visited last weekend and was now giving us her quotation.  It was nearly a million yen higher than the one we got before from Mitsui’s renovation company.  Of course, we’ve added a few things that we’d like to change since then, but I don’t think it was a million yen worth.  We weren’t super impressed by her either: it seems her company doesn’t have much imagination.

A bit of a shock: there were a few things that we’d seen last week at the Treasure Hunt that we’d decided this week that we’d actually like to keep (a milk pitcher, a door that we needed, a few more dishes).  But when Kumiko and I pulled up on our bicycles, we noticed a large truck in front of the house, filled to the brim with, well, everything that was in the house!

 

Our stuff that we’d put aside was safe, but the owners had obviously put the pedal to the metal on getting everything out (although we’d told them that they could wait until June, since we wouldn’t be moving in right away).

 

A few surprises: the rose bush that I was crowing about last week was missing.  I found pieces of it disassembled in the garden.  I thought at first they’d trashed it because it had been in a plastic pot, and I’d said we didn’t want plastic pots, but later I noticed a suspiciously bare rose stem sticking out of a pot under the neighbour’s porch.  It turns out that the neighbour had asked for the rose bush, and because I hadn’t mentioned it specifically, it was fair game.  On the plus side, at least it’s not dead.

Also, the door that we wanted to recycle and use between the kitchen and the new expanded living room was already buried under a pile of stuff on the truck.

 

Sigh.

 

The mikan tree in the yard, however, remains.  I made sure to make a point of this to the owners so they don’t end up giving that away too.

 

Final surprise: even though the owners hadn’t been expecting us to show up (looks like Hirasawa-san forgot to tell them), at the end of the day, they passed over the original and one copy of the house keys so that we can go there without an agent or the owners being present.

 

I thought that was really nice of them.  The house key now dangles on my keychain.

 

2010-05-26 00-02-24.480

 

It’s a pretty good-looking key.

May 21

Mortgage Signing

I was 30 minutes late for the mortgage signing.

 

The document panic had killed the wiggle room I’d left myself for travelling time, and I got to Tameike-Sanno station almost right at 12:30.  Before realizing that the bank’s officers are located near Kamiyacho station.

 

This is what happens when I don’t get enough sleep three nights running.

 

Not much to tell, really.  I sat there for two hours while the documents were explained to me (basically, a long list of things I could do to trigger a default), and then took my hanko and stamped the hell out of them.  I think somewhere, a devil smiled.

 

All that’s left:

  • Insurance
  • Registration (should be completed on Monday, May 24)
  • Booking the date and time of the settlement date and handing over the keys (tentatively June 7th at the moment, but we’re working to make it earlier).

May 21

Document Panic

So, moments before I was supposed to go out the door to head into Tokyo to sign the documents, I notice a missed call on my cell phone from the bank.  I return the call, and it’s just my rep reminding me which documents to bring, none of which I have… and beyond that, none of which I was told I would require!

 

At first, my rep says that he emailed the list to me, but a quick search of gmail turns up nothing of the sort.  Then he says we must have discussed it on the phone, but given that I scrupulously write down everything he says, I know this is not the case either.

 

In the end, he tells me we can still go ahead with the mortgage documents today and I can send the other stuff in at least a day before the final settlement.

 

Of course, in the meantime, I’ve wasted precious minutes searching for the one document that I do have, but can’t find because I don’t know where my wife put it (not her fault, she didn’t know I was going to need it today), so I may be late for the signing.

 

The bank has been great, and my rep is super friendly, but I’m sure it’s not just me dropping balls here.

 

Grr.

May 21

Mortgage Signing Today

I’m about to get ready to leave for Tokyo to sign my mortgage papers.

 

Apparently, either the registration for the second floor has gone through, or the bank has received notice that it will go through, so I’m able to go in and take care of that.  That means we can close as early as May 28th if I can get the insurance by then.

May 18

Renovations and Treasure Hunting – Pt. 2

Right, so we went back to the Kamiooka Tea House on Sunday, this time first thing in the morning to do treasure hunting.

 

This room, in particular, –>

 

In case you haven’t been following this blog, the story is this:

 

The previous inhabitant of the house died, and a lot of her stuff is still in the building.  The three brothers, who are now the owners of the place, told us that we could keep anything we wanted from it.  So we arranged to meet them and go through the stuff.

 

I didn’t want to appear too nosy while we were there with them, so I didn’t take any photos inside the house.

 

Some treasure hunting highlights:

 

  • a vintage 1960s or 1970s Sanyo toaster.  A few flecks of rust on the chrome, but otherwise remarkably intact.  Even the old-style electrical cable (fabric-style insulation) is meticulously preserved!  I plan to clean this up and at least put it on display, if not actually use it.
  • an ice shaver, for making shaved ice treats.  I have one of these at home, but this one is still in its great 1970s or 1980s vintage box.  Once I clean the box, it will also make a great display item to populate one of the several display shelves in the house.
  • antique carpenters’ tools.  I will need to clean these up at some point.  These might be a giveaway/sell item, though some of them may be useful for clearing brush in the yard.
  • three working A/C units, two of which are also heaters—this means that with the two we’re bringing with us from the current house, we don’t need to buy any, saving us around 300,000 Yen.
  • a beautiful kakemono, portraying Mt. Fuji, to hang in the upstairs tokonoma.
  • a 30-day wind-up clock that currently hangs in the living room.  Definitely mid-Show period-looking.
  • a whole whack of tea sets for Japanese tea ceremony
  • all the decorative items in the genkan.

<- Anyone want some pots?  I asked them to remove all the plastic ones and leave the clay ones.  This is just one of about three piles.  Anyone?

 

 

 

 

 

 

 

 

My wife pulled out a whole bunch of dishes.  We have too many dishes already, but we don’t actually have any complete sets.

 

The sellers’ agent was on hand as well.  She’d asked permission from Hirasawa-san if she could also put in a quotation for renovations (apparently, the po-dunk real estate company she works for/owns/whatever also does renovations), so she was there with her contractor.

 

That company apparently specializes in plumbing, so we were able to get some interesting information out of them.  For instance, the downstairs toilet is not tied in at all to the waterworks on the second floor.  And the dark stains on the wallpaper around that toilet are not water stains, but urine stains (there is evidence in the form of a poop-chair and the handrails throughout the first floor that the woman who lived there was in physical decline for quite some time).  I’m glad that tidbit was revealed while the owners were elsewhere in the house.

 

At one point, I was looking in the sideboard in the future office, while my wife was sorting things upstairs.  After pulling out a cocktail shaker and some cool-looking cards that I couldn’t identify, I decided to leave the room until my wife could check it.

 

I noticed moments after I left the room that the sellers’ agent had asked for and removed the best looking china tea set from the sideboard and spirited it away.  I know that this stuff isn’t ours yet, and the owners are free to give away any of it that they like, but it would have just been courteous to have asked first.  Honestly, even though it was the best set, we probably would have just let it go to preserve harmony.

 

At the end of the day, Hirasawa-san also was able to take home a tea set, his complete with pot, but he had at least waited until the very end.

 

We’re definitely keeping more than we need anyway, and even thought it was the nicest set the sellers’ agent took, we still ended up with an okay set for ourselves (as opposed to the mish-mash we have now).

 

In any case, it was a lot of fun, and the agent behaving that way was more of a laugh than anything else.

 

We forgot a couple of things that we’ll have to email them about (in particular, the old kitchen door, which is sitting loose in the future office room—reusing that will save us 60,000 Yen), but yet another task is complete.

 

Next… insurance…

May 17

Renovations and Treasure Hunting – Pt. 1

 

This weekend we were at the Kamiooka Tea House not once, but twice.

 

We decided to get quotations from multiple renovation companies for the work we want done on the house, so on Saturday we visited the house with another renovation rep and a guy who seemed to be her head carpenter or contractor or something (evidenced by the fact that he wore coveralls instead of a suit and seemed to know what he was talking about, structurally speaking).  This was a change from the last time, when it was only the designer/advisor or whoever it was, though we will let them make another bid as well.

 

We have made some tweaks to the original ideas we had for renovations:

 

  • We’ve asked them to price out how much it will cost to move the patio-door-style windows in the living up the wall in order to allow more light in and make them not doors anymore.
  • We’ve asked them to extend the balcony off the Tea Room in order to make it big enough for a small table with chairs (I envision breakfast there in the autumn and spring.
  • I noted that the power to the house is only 40 Amps!  (Our current house is 60 Amps, and we still manage to trip the breaker now and then, especially in the kitchen). We definitely need to fix that.
  • We’ve asked them to price out the cost of double-glazing all the windows (we can get some of the money back from the government for that).  Even though the wall insulation is sure to be terrible, double-glazed windows will really make a difference to heating the rooms.
  • Adding a plaster-type coating over the sand-based traditional Japanese walls on the first floor.  Will reduce dust and can be painted in case we want to change colours later.  (The contractor this weekend was, like me, really adamant that we should keep the Japanese woodwork on the walls as much as possible.)
  • We’ll move the TV to the 6-mat Tatami room on the second floor
  • My mother-in-law, who was there with us convinced me to ask them to install bars in front of one of the windows in the 6-mat Tatami room on the second floor because it was low and dropped straight off and was therefore dangerous for kids.
  • My mother-in-law also tried to convince me that the window on the south side of the house was similarly dangerous, but that one opens onto a roof, and my feeling is that a kid wouldn’t fall out of that one by accident.  Yes, it’s conceivable that someone could get hurt by crawling out onto the roof and falling off, but then I might as well put foam rubber on every sharp corner in the house.  So we’re not blocking off that beautiful window from the inside as she had suggested.

Well, I think that was it.  Part two coming soon: the treasure hunt!

May 13

Not Rocket Science: Let This Be A Lesson To Future Home-Buyers

2010-05-13 17-26-15.132 <- This is me, pulling out my hair. 

 

More fur is flying around our house purchase.

 

So, the second floor registration is happening.  The marker check (what I originally thought was a survey) is not required for the house to change hands.

 

BUT… the owners thought that they had until the end of July to clear out.

 

Why?  Because our latest possible closing date is in the contract as July 27.

 

When Hirasawa-san asked us when we wanted to set the closing date, I said early June.  He, however, suggested we negotiate for the end of July, in case there was any problem.

 

I said that I really wanted to make sure we closed as soon as possible so that my wife and I could potentially move in July, the only month of the summer that I’m spending in Japan this year, but sure, safety sounded good.

 

Bzzzt!  Wrong!  No one told the sellers that the date in the contract was a fallback position.  Of course not, because getting it that far out was a negotiating point.  So the sellers thought that they had two extra months to clean all the junk that we didn’t want out of the house.  And now, they’re apparently panicking because they’ve discovered that we do want to close early and they’re worried that they can’t clear the stuff in time.

 

So, essentially, a bunch of Japanese people (the owners, the agents, and the Japanese person from the bank, and probably my wife), are all clucking away about this.  When, of course, the solution is dead simple:

 

  1. The owners do not want the house contents (anything I don’t want will go in the trash).
  2. The owners do not currently live in the house.
  3. We will not be instantly moving in, as we have renovations to do.

THEREFORE: We can allow them extra time after we take possession for them to move their stuff out

 

Not rocket science here, people…

May 13

Today’s House Confusion Not A Big Deal, But Still Weird

Okay, so I spoke to Hank the banker this afternoon after all the confusion this morning, and it turns out that everything is fine, although the mortgage documents are going to be delayed while we register the second floor of the house.

 

Not sure what’s happening with the survey, though, because it turns out that it’s not a re-surveying of the land that the owners need to do, but a check to make sure all the posts demarking the boundaries of the plots we’re buying are still in place, which apparently is not a mortgage requirement but a contract requirement that our agent added.  So the bank shouldn’t give a crap.  Hank is checking that.

 

He told me this afternoon that registering the second floor should take a week and that he recommends that we allow one of the scriveners that the bank uses to do that.  He said he’d get back to me with a price on that tomorrow.

 

Okay, and here’s the weird bit: we got an email from Hirasawa-san tonight which said that he got a call from the bank’s scrivener on Tuesday about this and that he’s already informed the bank that he’s started the registration process (which will, incidentally, cost 80,000 Yen, which includes both the registration fee and the scrivener’s fee).  So two questions:

 

  1. Why didn’t Hank know about this?
  2. The impression I got today is that the scriveners were not bank employees, but freelancers, so why would someone identifying themselves as a scrivener for the bank make a call to Hirasawa-san?

I’ll have to sort this out tomorrow morning.

 

The good news is that everything else is still on.  We’re still waiting to hear back from the owner to see if we can go Treasure Hunting on Saturday, and we’re looking at quotations for insurance and poking around at renovation companies.

May 12

Stress Not Over

Just got an email from the bank.

 

They cancelled my signing of the mortgage documents on Friday because it seems they just noticed that the land is being re-surveyed and that the 2nd floor needs to be registered.  They’re not saying no, but they’re delaying the signing until these items are complete.

 

The actual closing date in the contract is late July, so they’ve decided that there’s no rush, I guess, or something.

 

I wrote back telling them that I want to close in May, so that we can move in July… and I guess we’ll see what they come back with.

 

ARG!  FRUSTRATION!

 

I’m a little surprised by what I can only interpret as either clumsiness or disorganization on the part of the bank.

 

I was going to hop on my bike to do a shopping run, but I feel now like I need to wait for the reply because I’m so stressed out.

May 11

A Breakdown of The House-Buying Process Online

I came across this link while looking for something else.  They do give a good overview of buying property, but there is definitely information missing (e.g. dealing with foreign banks, etc.), and it’s Toyko specific.

 

Still, it’s not bad for giving you a sense of the process.

 

With no further ado:

 

http://www.housingjapan.com/real-estate-tokyo/buying-guide/

 

Hope it’s of some use to somebody.

May 10

Woo-Hoo! Our Bank is On Board!

Got a call from the bank just a few minutes ago…

 

Our mortgage is approved!

 

To do:

 

  • collect our current bank statements and send them to the bank to prove we have the down payment amount (frustratingly, this will probably have to wait until tonight when my wife comes home)
  • apply for fire insurance (we need the quotation and proof of premium payment by the final signing date)

The insurance requirement is interesting.  Apparently, according to Hank, my loan officer (relationship manager I think is the exact title), Japanese banks require you to buy insurance for the total loan term, and frequently broker the insurance yourself.  Our bank, on the other hand, doesn’t broker this, and instead only requires one year of coverage (though I’m sure we’ll want the whole term).

 

I sent an email to my wife to let her know, and she emailed back: “Finally, I can sleep.”

 

I suggested she not sleep at work.

May 06

House Hunting Blog on Facebook

I am currently attempting to have my blog automatically update to Facebook.  This post is kind of a test.

 

Also, I’m using this to announce that I’ve done my best to blog the experience of buying a house in Japan (far from finished yet).

 

For the (very) few of you who have actually been reading this from the beginning, my apologies for the interruption.

 

You can see older posts by visiting http://squeeze-box.ca .

May 06

Oh, Some More Notes

I think I forgot to mention that one of the reasons that the Kamiooka Tea House is inexpensive is that our contract specifically limits the responsibility of the previous owners to absolutely nothing.

 

If we turn the water on and the pipes explode, or there’s no water pressure, or the gas pipes have a leak… it’s just like buying a house in North America… it’s our dime.

 

Interestingly, this is not usually the case (although common with older houses), and had to be specially provided for in our contract.

May 06

Too Late!

If only this book had been available when we started!  Now I’m paranoid that it contains information on managing risks that would have been useful to me:

 

http://www.debito.org/?p=6636

 

But holy fuck, the book is around $87 U.S.D. ($659 HKD).  Now, that’s not a big investment in terms of buying a house, but you’d think that there’d be a chapter preview of some kind so that you could get an idea of whether this guy is out-to-lunch or not.

 

Still, I’m kind of disappointed that this wasn’t available when we started looking for a place this February.  Given that no one really walked me through the process of buying a house (the agent doesn’t speak English, and the bank, I guess, assumed that the agent would do it), it probably would have been worth the steep cover price.  (Provided that the guy actually knows what he’s talking about.)

Apr 30

Contract Signing – Part 2

Right, so in Part 1 I wrote about the owners of the Kamiooka Tea House and how they seemed cool, and how their real estate agent was a bit of a dingbat.

 

After going through the contract, we started the signing.  Occasionally, my wife would talk with Friendly.

 

Friendly was the one who had complained about our offer being too low (19 million from nearly 22 million, and the house had only been on the market for 2 months).  I originally had thought this meant that he was greedy, but, as it turns out, this wasn’t the case.  He just seemed interested in the process, and interested in us.

 

At one point, the subject of all the stuff left in the house came up (if you’ve looked at the photos, you’ll see that the house still has the deceased owner’s stuff in it), and if we could maybe keep some of it.  We were thinking primarily of the air conditioning units (provided they’re working, of course), but they also had some nice dishes, china sets, and such.

 

The words were hardly out of my wife’s mouth when Friendly and the others insisted that we go there and mark all the stuff that we want to keep.  Hirasawa-san said something about how the owners might want to go through it first, in case there was anything valuable like Kimonos (there was a Kimono wardrobe in the storage room which was definitely full of something), but they replied that they’d already taken everything out that they wanted.

 

They were happy to just have us go and choose on our own, but my wife suggested it would be better if one of them was there with us in case we unearth any treasures.  Friendly laughingly agreed to this, and suggested we come during Golden Week… at which point Hirasawa-san interrupted and suggested that perhaps we should wait until the financing was final first.

 

The strange thing is that there is treasure in the house, according the Friendly and the gang.  Their father was really into Bonsai, and while the plants themselves, like him, are long dead, the pots he used are still in the yard.  Apparently these are relatively valuable.  There is also the good possibility (according to them) that the kimono wardrobe actually contains kimono, which are also not cheap items to be lightly discarded.

 

And it turns out that the mother (the last occupant of the house) did not run a tea ceremony school, as I had suspected, but instead just loved tea ceremony.  And apparently the tea ceremony set and tools are still in the house somewhere… and the owners are happy to let us keep them!

 

My wife was incredulous and asked if perhaps the grandchildren wouldn’t be interested in any of these things… but apparently not.

 

Maybe the owners just don’t want the hassle of organizing and removing things… but it’s weird, since things like the bonsai pots could probably sold for a decent price on an online auction shop or at a flea market.

 

As my wife and the owners spoke, we continued to learn more things about the house and the family history.

 

Apparently, none of the three sons lived in the house after the second floor was put on it.  And while I thought that the second floor was built to accommodate the mother’s growing tea ceremony business, it turns out that they just built it because they “wanted to feel rich” (the translation I got).  Friendly wouldn’t say how much the addition cost because he was embarrassed about how much his parents had spent on it.  But he and the rest of the owners were relieved that I thought it was beautiful.

 

The husband and wife used the second floor only for guests and tea ceremony, which is mind-boggling to me.  Why spend all that money and then essentially confine yourself to the dingy first floor of the house?  Of course, the upside is that the second floor rooms are pristine… it’s the only part of the house that we don’t need to do some kind of work on.  Even the tatami don’t need to be replaced!

 

There are some quirks about the house and land that we learned that I’ll deal with in another post, because this one is getting long, but all in all, it was fascinating to listen to, when I could understand, and more fascinating after-the-fact when Kumiko filled me in on what I’d missed.

 

We finished signing (well, sealing with inkan), passed over our money for the deposit, and Hirasawa-san wrapped everything up.   After the owners and their agent had left, we paid him (refundable if the bank doesn’t come through, though), and Hirasawa-san sealed the documents for the bank up in an envelope and addressed it, and then gave us a very handsome binder that held all the documents about the house (many of them copies, but we’ll get the originals if we get to the payment step).

 

He’d waited for the owners to leave because he didn’t want them to see the nice binder we were getting, since their agent hadn’t prepared anything that nice for them… I joked that it was the most expensive binder I’d ever bought (har har har).

 

So now, we are just waiting on the valuation from the bank.  The two worst-case scenarios are either that they decide not to lend money, or that the valuation is so low that we fall below the minimum loan amount of 15 million yen.

 

Other bad things: the bank asks for more paperwork or to wait on the 2nd floor registration and holds things up.

 

I’m really hoping none of this happens and that we get a positive answer the week after next (next week is Golden Week, so I can’t imagine we’ll hear before that).

 

Fingers crossed!

Apr 30

Documents Issue Resolved

Whew.  The person filling in for our rep has intercepted the package and made sure that the contents get to the Valuer… which is good, because they were apparently required.

Apr 30

Goddamn it!

So, after signing the contract yesterday (Part 2 coming soon), we sent a copy and the remaining documents to the bank.  It was a national holiday yesterday, so I waited until this morning to email our rep to let us know they were coming.

 

I immediately get an ‘Out-of-Office’ message that says he will be out of the office until May 10th!

 

Okay, sure, people should go on vacation, but this guy knew I was sending this info in today, and he didn’t give me a heads up that he’d be out of the office!  Maybe these documents aren’t required for the valuation, but I don’t know one way or the other.

 

The bank’s been pretty good with us, but there is a real communications issue here, which I’ll discuss in another post.

Apr 29

Contract Signing – Part 1

Today we went into the real estate office to sign the contract with the owners of the the Kamiooka Tea House.

 

I sent a bunch of the papers to the bank in advance earlier this week, and they reported that so far there didn’t seem to be a problem and they would get started with the valuation in advance of the contract.

 

I also signed what I guess is the equivalent of a power of attorney to allow Kumiko to do the writing and stamping for me.  Not because I can’t write my address and kanji name (which is, by the way, 新垣安竜, in case you were wondering) a bazillion times, but because I can’t write my address and kanji name fast enough.  This meant that on the final document, instead of my big, manly, jitsuin, the document is ‘signed’ by the same tiny, off-the-shelf stamp that Kumiko uses to receive mail.

 

Sigh.

 

So, the appointment was set for 10:30, and we arrived just on time: a minute or two early.  We were ushered into the re-house conference room where the three owners and an unidentified woman already sat.

 

I assumed that the woman was the owner’s agent, but it seems that she was somehow related to the three men (the owners) sitting at the table.

 

The owners were three brothers, all in their fifties or sixties, and they looked completely different.

 

Sitting to Kumiko’s right was the one I’ll call Friendly.  He was the most gregarious of the bunch, and seemed to know a lot about the house and lands (despite the fact that they had all moved out before the second floor was put in).  He was the one who had been in the hospital (yes, only one of the owners had been in the hospital) and had insisted on being present.  You may remember that my original reaction to this was to assume that he was a grumpy old bastard.  In the end, it turns out that he is just very interested in the house, its history, and the selling process.  It was best that we waited for him.

 

Next to Friendly, still on the west side of the table, was Sleepy.  He wasn’t falling asleep or anything (no, that was me), but he just looked very laid back.  Pudgier than his brother and more withdrawn.

 

Across from Friendly, on the east side of the table, was Ol’ Smokey.  His skin was a deep tan, leathery, and pulled tight.  Definitely the skinniest of the three, he had a pack of cigarettes in his shirt pocket.

 

The woman sat next to Ol’ Smokey… and we never did quite figure out whether she was a sister (then why wasn’t she an owner?), or Ol’ Smokey’s wife.

 

Hirasawa-san sat across from Kumiko, also on the East side of the table.

 

Noticeably absent was the owners’ agent.  She’s the domkop who didn’t catch the items in my previous post (unregistered 2nd floor, wonky survey data) and let totally wrong information end up on the house brochure.  Apparently, she also thought that the first hour of the contract signing was too boring to merit her presence.

 

The first part must have been boring for the owners, because it consisted of Hirasawa-san guiding us through the contract clause-by-clause and Kumiko translating for me.  However, the owners had specifically requested to be present for the whole event, which is just a preview to how cool they are.  I think it was really bad form, however, for their agent not to show up.

 

She finally did show up at around 11:30.  She looked like somebody’s aunt.  Her hair was a bird’s nest, and I thought she looked very poor… until Kumiko pointed out to me later that she was wearing a designer jacket and carrying a Louis Vutton handbag.  I don’t catch these things, you see.

 

Normally, I’m all for the underdog against the big company, and until I realized that she spent all her money on her bag and clothes, I thought it was a little endearing that she carried her supplies in a cookie tin (versus Hirasawa-san, who brought his in a smart, leather box)… but, she was clearly incompetent.  A couple of times, she started to do something (like create a receipt, or put currency stamps on the wrong document) and Hirasawa-san had to gently tell her that it wasn’t part of the procedure.

 

I now realize how lucky we were to end up with Hirasawa-san, someone quietly competent and customer-oriented, as our agent.

 

To be continued tomorrow…

Apr 24

More Drama

So, the Kamiooka Tea House brings more drama…

 

So, it turns out that the previous owner has not registered the ENTIRE SECOND FLOOR with the city.  Also, it seems that they gave the wrong number for the land area because they were using very old survey data (and actually made a typo there as well).

 

Hirasawa-san has managed to convince the owners that they need to pay for the new survey (around 300,000 yen), but we will have to pay for registering the second floor (100,000).

 

What’s annoying about this is simply that this information wasn’t uncovered until Hirasawa-san started going through the documents that we need to send to the bank!  The seller’s agent had done no work on this!  (I guess that we should have been clued in when the property brochure showed a door where there is currently a section of wall in the living room.)  It erks me to pay for something that we should have know about, but it may also cause complications with getting our financing… and it takes 2 – 3 weeks, which will add yet another delay to the process…

Apr 22

Good News and Bad News

Okay, the good news is that the owners of the Kamiooka Tea House have accepted our offer.

 

The bad news is that they want to delay the contract signing date from this Saturday to next Thursday, screwing up my schedule even more.  (I’m kind of set on getting everything done before I leave for Canada at the beginning of June, and I’m having trouble setting my flight date because I don’t have an idea of a probable closing date.)

 

Apparently, two of the three owners are in the hospital, and one of the hospitalized ones is getting out next week and wants to be present at the contract signing.  Grrr!  Also, this same owner apparently complained that our offer was too low (it’s just under 3 million yen below their asking price) given that the house has only been on the market for two months.

 

Luckily, Hirasawa-san is a master negotiator, and managed to convince them.  He reportedly told them that because the house didn’t have a car space, that we’d have to pay for parking, and calculated it out over 25 years.

 

So, things are moving ahead.  Now it’s really just the bank that can throw something unexpected in our path…

 

Stress!

Apr 17

Kamiooka Tea House Revisited

So, you may remember that we saw a place I called the Kamiooka Tea House right at the very beginning of this process and that it dropped off our list as we saw more places.

 

Well, funny thing happened there… when the Higashi-Totsuka House, which had been our second choice after the second round of visiting houses, got eliminated by the bank, suddenly we weren’t left with much.  The only possibly liveable places left that we’d seen were the Skinny Idogaya House and the Kamiooka Tea House.

 

The Skinny Idogaya House was too far from the station (18 minutes from Idogaya station, a local stop on the Keikyu line) and was at the top of our price range, leaving no money for renovations (there was at least 1 million yen worth of renovations that needed to be done there, including completely redoing the Tatami room which had been mauled by a bear).

 

So, despite the fact that we’d rejected it earlier on, we took another look at it and decided that it would be liveable, provided we could do some renovations before we moved in.  Hirasawa-san arranged for a renovation company rep to go through the place with us.

 

Below are the proposed before-and-after images:

 

 

Kamiooka_5LDK_Tea_House_Floorplan Kamiooka_5LDK_Tea_House_Floorplan

 

(I’ve also drawn in some furniture placement ideas on the ‘after’ one.)

 

Major changes:

  • Complete reconstruction of the bathroom (not the toilet) in order to modernize it and add a changing and laundry area.  This will eliminate the current mop-closet thingy that has half a toilet in it.
  • Removing the current sink and stove area and replacing them with a modern ‘system kitchen’ along the south wall.
  • Blocking the west door from the kitchen (dropping the number of doors to the outside from 7 to 6!)
  • The opening up of the living room by removal of the hallway.  I wanted a more radical opening up, but apparently, parts of the wall are structural.  However, we will remove the skin from the wall, leaving the wood bracing only, which will help light up the space quite a bit.
  • Changing the altar space in the front bedroom to a closet, and the existing closet to a nook for the bed.  We originally wanted to rip that whole space open to create a bigger room, but there is a structural and beautiful piece of wood dividing the closet and altar that we can’t and don’t want to get rid of.
  • Removal of the living room closet to make a television nook.

Minor changes:

  • Changing some walls and doors, especially in the kitchen area, where they are badly stained
  • Changing an altar space in the living room to a mini-closet.
  • Adding doors in places where none exist now

 

We think that with these changes it will be liveable, provided we can afford both the house and the changes.

Mar 15

The Bank

I met with my financial advisor, Jason Hurst, back in January, and told him that I was interested again in buying a house.

 

He put me in touch with the Australian Commonwealth Bank.

 

Normally, one would use a Japanese bank, but this bank offers certain advantages.

 

Actually, I could borrow a lot more money from a Japanese bank, and have a much lower down payment, so why go with a foreign bank whose maximum loan amount is half what the Japanese banks would lend me?

 

Advantages

  1. Loan Term and Age of House
    Japanese banks will generally loan for up to 35 years, but they take the age of the house into account when doing so.
    The Commonwealth bank has a maximum loan term of 25 years, but they don’t care about the age of the house, only the land value.
    This means that I can consider houses that are less expensive and yet bigger, simply because they are older.  It also limits my competition.
  2. Strictness of Rules
    Japanese banks have many very strict rules about what kind of property they will give loans for.
    The Commonwealth bank is somewhat more flexible.
    In theory, this means that I can consider houses that might have minor problems (small extensions that bring the house over the square meter limit of size for the land they’re on), which Japanese banks would absolutely say no to.
    In practice, I’m not sure how much of a difference it makes.
  3. Native English-Speaking Loan Officer
    They sometimes have these at the Japanese banks, but since with the Japanese banks, the real estate agent makes the application for you, you kind of have to just take what you get, especially if you’re buying outside of Tokyo.

 

Disadvantages

  1. Loan Amount
    Because the Commonwealth bank will lend only up to 80% of the value of the property, than means a much bigger down payment amount, and therefore a potentially much lower maximum loan amount, since you need the other 20% (plus fees) ready in personal assets in order to make the purchase.  My understanding is that the Japanese banks will sometimes lend you larger percentages of the purchase price.
  2. Interest Rates
    The Japanese banks can give you a fixed interest rate, unlike the Commonwealth bank, which has only the option for a floating interest rate.
    The big concern here is if the interest rate skyrockets (it has been as high as 10%, historically), which could make your monthly payments more than double what you anticipate.

 

In the end, we decided that it was better to buy an older house for what would be closer to the value of the actual land (since older houses tend to add very little, if any, value to the property) than to buy an expensive new house which in 20 years could go down in real value (declining population, the fact that a new house can account for half the value of the land it’s on, etc.).  Buying an older house meant that the Commonwealth bank had the advantage, so that’s how I made my decision.

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