Transcript
Speaker: Welcome to the Buying a House in Japan podcast. My name's Take. And I'm Joey. And we're two friends who just quit our corporate jobs and bought a cheap house in rural Japan. The goal of this podcast is to document the highs and lows of the process while informing you of every step you need to take in order for you to do it yourself too. We're by no means experts and we're doing this for the first time, but we hope this gives you a realistic expectation if you embark on this journey yourself and we hope you enjoy the show.
Speaker: All right, all right. Episode one, excited to be here today. Joey and I just bought a house in Japan, specifically down in Southern Japan in a famous hot spring city called Beppu for 42K. We're making this podcast in hopes of helping other people that are interested in the home buying process. Ultimately, we're making a podcast we wish we had when we started this process.
Speaker: So today we're going to go through the steps we went through during our home buying process. We'll keep it pretty high level as we intend to have subsequent episodes that go a little bit more in depth in each step, specifically highlighting the timeframes and the challenges we faced. Let's get this kicked off with step number one, which is identifying properties. Joey, you want to take it away?
Speaker: For us, we started right away. As soon as we decided to do this, we got online and we started looking at properties. There's a few different big players in the space. Cheap House of Japan is the main player. He's got a fantastic Instagram account that you can just passively follow. Really great properties on there. He also has a subscription newsletter where you can browse his Google map. And I think he's adding properties every week to it. He also has featured properties.
Speaker: I think that was one of our main sources of looking for listings, at least initially on, and at least got us very excited about it. Just to echo that Cheap House is Japan. Michael over there does a really great job. So take a look at their Instagram, Cheap House is Japan. His website, I think it's CheapHouseIsJapan .com. That's where we initially found our first couple spots that we're identifying, but also we looked at internally built tool. Joe, you want to talk a little bit about AcciaMart?
Speaker: Sure. Yeah. So we wanted the ability to filter homes by price range by age of building and just have a little bit more options in specific areas that we were looking at. So part of our motivation.
Speaker: We were looking for a vacation home. We weren't looking for an investment property. So we were looking to expand the leisurely activities that we like to do. We love hot springs. We love to surf. So we were looking for more options in specific areas. So I built AcuMart, which takes data, scrapes data from a few different Japanese real estate websites, compiles it into a very zillow interface where you can sort by.
Speaker: and filter by things like price, age of the property. You've got a great map view, you've got a list view, and we're filling it out with more resources too about buying a house in Japan. So check it out, acchiamart .com with a hyphen between Acchia and Mart. Name might change, but yeah, actually we ended up using this product ourselves and that's how we found our place in the end.
Speaker: So step one, identify the property. Everyone's path is going to be different here, whether it be looking at Instagram post or having a family friend or going to Japan and loving a town and looking for property there. There's a couple of different ways. Again, Instagram cheap houses, Japan, AcuMart .com. And there's also a couple of local real estate sites. We'll talk about that in further episodes, but by and far those two, AcuMart and cheap houses, Japan, I think are the way to go when identifying. So.
Speaker: One last thing I'd like to say about step number one is one issue we did run into was we got a little bit concerned about landslides at one point. So part of that sort of due diligence process is if you're buying something on a cliff face or whatever, you do need to be cognizant of natural disasters in Japan.
Speaker: Yeah. And I think that we'll talk a little bit about the due diligence side later when we go into home inspections. But again, step one, identify property. Now step two for us was connecting with an intermediary. Both Joey and I are not native Japanese speakers or Japanese language skills suck, contrary to my name being Japanese. Both of us are non -residents. I live in California. He lives in Nova Scotia, Canada. So we're doing this completely remotely. So in this situation,
Speaker: We received advice that we needed an intermediary, someone on the ground that speaks Japanese, that can send documents, that can do things on our behalf. So we actually reached out to this guy named Ziv who runs a company called Nippon Trading International. They were super, super helpful guiding us through the process. We learned a ton. We can go, we'll go into each initial step, but once we connected with Ziv and deemed that this was the right fit,
Speaker: We signed a couple of different contracts, signed a power attorney, so that would allow Ziv and his team to go out and do things for us, as well as minimum transfer fees. So Ziv and his company, they need to get paid somehow.
Speaker: So they take a certain percentage of the property price. And for us, our property price was quite low. So there was like a flat fee, but yeah, overall, like really loved working with Ziv. I'm a California licensed real estate agent and I know how things work here in California. And I thought I knew how things worked in Japan, but it was great to hear from Ziv. He pushed back and be like, Nope, this is how we do in Japan. He would be really informative throughout the entire process. Joey, anything to add to that step?
Speaker: Yeah, definitely. I would say is it Ziv and the, what he brings to the table. He's the glue for this whole process. His process would not have been possible without Ziv. If you don't, yeah, have it, you don't have a Japanese bank account in Japan. You're not going to be on the phone contacting these real estate agents. He's what makes it possible to do all this from wherever you are in the world. And for me, who has never been in the.
Speaker: real estate game in Canada or the United States. This was a big step for me to buy a house. Ziv has so much expertise in the space and he is the connector between so many moving parts in this process that it was a critical step, this step to connect with an intermediary.
Speaker: Yeah. So step one, we identify the property. Step two, we connected with Ziv and actually showed him the identified property. We're like, Hey, these are the three things. During that step two, he'll also talk through his opinion on pros and cons of certain areas or properties that you do show him. I also do believe he can help identify for you too. So potentially step two could become step one, but yeah, again, identify property. The next step inter connect with Ziv or an intermediary. If you don't have command of the Japanese language or are not on ground.
Speaker: Next up, once we had identified connected with Ziv, we then set up a virtual viewing. Joey and I were both doing this remotely, so we actually had Ziv drive down to Beppu. Him and his wife were nice enough to go out there and dial us in via Zoom.
Speaker: Ziv had contacted the real estate agent in Beppu and organized the time. So that was super helpful. We looked at two properties quite quickly and it was very clear from not only his opinion, but also just the viewing of the property that we found the clear winner during this time, virtual viewing. I know it's weird. My gut instinct is always, oh, it's so cheap. Let's go ahead and just buy it, decide on scene.
Speaker: resist that urge, I would say is something I've gotten advice from. Seeing it in person, seeing at least via Zoom gave a lot of good context.
Speaker: It's easy to get excited about these $6 ,000 homes in the heart of Beppu City or this like home on the cliff with that has a beautiful view for $20 ,000. And Ziv was a great voice of reason in a lot of these situations here. So again, a lot of help there from someone who has expertise, who's looked at so many different abandoned homes around Japan as well. And he can help you, he can help you not make a bad decision.
Speaker: A little bit more additional context, I'd actually gone to the city with my girlfriend back last November 2022 to go on vacation. So I would highly recommend if you have never been to the spot or area or neighborhood, or even Japan that you visit in person. We're maybe a unique case in that we had seen the neighborhood and known what we want, but
Speaker: I think it's always preferable to see it in person, especially as it was smelling out. Is there mold and all these things of these abandoned houses is important to potentially step in there and feel the energy. Yeah. Yeah. Are the floors squishy? That kind of thing. Yeah.
Speaker: So after we had virtually seen the place and we found a clear winner, we decided let's go ahead and extend an offer. So step four is offer extension and negotiation. During this process of talking to with our intermediary, he did let us know that it's not too uncommon of going with a 10 to 15 % discount or there's a little wiggle room. Japanese as far as I think culturally is a little bit more black and white.
Speaker: making sure that you're not going with a tire kicking super low ball offer like I sometimes do in California is you just need to be a little bit more cognizant of that. So he gave us advice that 10 to 15 % is a pretty standard starting point for negotiation. Yeah, with differences, like he did mention the more rural and the older the home, the more of a discount you can command.
Speaker: Yep. So we went back and forth with the price. I'm not going to get too far into it, but keeping it in US dollars, listing prices around 54K. Our first offer was right around 45K. So we went right around 10 % under.
Speaker: And that was actually thankfully accepted. The process went back and forth again, instead of being our quarterback on that and secured our offer accepted. So that's step four, offer extension and negotiation, but hold up, there's still more. Moving on to step five, we have the home inspection and final offer. So after the.
Speaker: seller has been like, yep, let's go and accept this offer. We send in a home inspection. This is pretty typical. You can, I think, waive the home inspection, but I think, again, similar advice of not being an eager beaver. Definitely doing a home inspection is probably the move in case you find something crazy. Yeah. Yeah. We learned some good stuff through the home inspection.
Speaker: So this is, again, something that you need to pay for. And we had already sent a chunk of change over to Ziv to pay for his initial minimum fee. And at that same time, or very shortly after, we also budgeted about $2 ,000 US for the home inspection. I didn't run that much in the end, but.
Speaker: It took a few weeks to schedule after our offer was accepted. And this guy was very thorough. He had a bunch of gadgets for measuring humidity in the attic and gadgets for measuring the like the tilt of the floor. If the floors are tilted, he went around and we found some very small hairline cracks in the foundation. Do you remember anything else? Oh, some stuff with the roof. The roof looked good, which was one of our concerns.
Speaker: Yeah. I'd say if you're ever seen a home inspection in the US and California, just wait till you see these Japanese guys home inspections. They're insane. Like percent floor gradient differences and like really small things, but you really get what's your money. We've got like a hundred page PDF with images back all in Japanese back from the home inspection.
Speaker: Yeah, so really thorough and I think standards differ from the U .S. to Japan. I think in the U .S. I have things with like horizontal cracks and foundations. They're like this is solvable in Japan. They're like they see small things and they really emphasize and I think that's good that they're a little bit more conservative of what needs repair and they communicate that very well.
Speaker: Yeah, so after the home inspection, we decided to renegotiate the offer. So again, we got an offer accepted at 45 ,000 US. And after the home inspection, there was more water damage than we expected. The cracks in the foundation, we decided to
Speaker: make a different offer to the seller at a 40 K. The seller came back with his own offer renegotiated up to 42 K and we accepted at that. So the steps four and five here, we've blended together because our offer and negotiation process bled into the home inspection and those two steps were one for us. Hell yeah, Joey. We went from 54 K USD to 42 K. Nice work. Yeah. Great work. Wow.
Speaker: Also, quick note, during this time we were calculating roughly one US dollar to I think 148 yen, which is a great exchange rate. This is a big reason we bought. So these numbers obviously fluctuate based off US dollar to Japanese yen or wherever you're coming from. We end up accepting that offer for the $42 ,000. And now moving on to step six is the funds transfer. How do you transfer money from the US to Japan? Joey, how did we do it?
Speaker: Yeah, there's two different apps you can use. It's, it's actually very easy. I had never done this before and I had set it up within 30 minutes from my home in Canada. I signed up with OFX. You can also use an app called Wise. Our intermediary, I think we get, he gets some kind of deal or we get some sort of tax off or something like that through both processes. So it doesn't even matter which one you use if you're working with Ziv.
Speaker: set up your account, you fund it with your bank account. Was it a bank transfer? Why a transfer? I can't remember. Sorry, it was a bank transfer. Send the money there and then you can select your conversion rate when you're making the transfer. There's different options. It was a little bit over my head. I just did a standard market rate.
Speaker: converted the money and I think it was very quick, within a week, Ziv had received the funds. So very easy, not going to be afraid of. So just to be clear, yeah, Ziv, our intermediary, again, crucial part of here, we don't have a Japanese bank account and in order to transfer this sale, you need to have a Japanese bank account. So we transfer funds from ourselves to Ziv, Ziv's a bank account, and then Ziv then went to the seller and transferred that money. So that's step six, funds transfer.
Speaker: All right, now step number seven, transfer of title from the property at the Ministry of Affairs. This was a big black box for us. We didn't really understand what this was just for context. Japan is still a very much like paper trail type government and does things very, I think, slowly compared to what we feel. We go a little loose and wild west in California when it comes to real estate. It feels like comparatively into Japan.
Speaker: This step seven of transferring the title took a lot longer than we thought it was going to be. Generally what this entailed was us giving power returning to the Scrivener, which is like, how would you describe a Scrivener Joey? I believe it's just a government clerk. Someone that stamps documents is my best guess is probably like almost like a notary public, but for the government.
Speaker: So during this step, we more or less gave this Scrivener power of attorney saying, yes, you can transfer this on our behalf. But we also had to give like a statutory declaration, which is like, where do you live? Japan wants to know, again, you don't need to be a resident to buy properties, but they do want to know like, where the heck in the world are you? So we had to get this document saying, I live in California and notarized by a notary. And Joey had to do the same. And then I think once they had,
Speaker: Those documents, again, sucked. We had to send it over from the US. It cost like $80 of FedEx, but when all that paperwork was there in person, again, had to be there in person or hard copy versus digital, it took a little bit longer than we wanted, but the Scrivener did perform that tile transfer. And yeah, that was step seven. Yeah, pretty easy. All we had to do was sign documents, but pretty black boxy as to what's actually happening in this step, but it's ultimately a
Speaker: official title transfer with the government. Cool. After we had that in step eight is getting the keys. So we actually haven't got the keys yet. We're headed to Japan right now, but again, luckily
Speaker: We have Ziv as our intermediary, so he has received the keys. His company also does a little property management for people like us who are coming and not always living in Japan. So they're setting up the internet, the water, gas, general utilities, even cleaning and gardening. But they're shipping the keys to my friend who actually lives in Babu, who I found out coincidentally is there. So shout out to Reiko. Thanks for grabbing the keys for us.
Speaker: Yeah, like I said, Ziv and Nippon Tradings International, they're the glue. Everything from handling a bank account for you to setting up utilities, it's really the glue that makes the process possible. Yeah. So those are eight steps just to recap again. It's quite similar to most real estate transactions. And we'll go through a couple of learnings throughout later episodes, but also at the end to conclude this episode. So step one was identifying the property. Step two, connecting with intermediary, Ziv in this case. Step three was a virtual viewing, seeing the property.
Speaker: Step four, extending that offering, going back and forth in negotiation. Step five, after that offer is accepted, you have a home inspection and kind of a final offer you can give out. Once that offer is accepted, step six, we transfer the funds. Step seven, we have the Ministry of Affairs, the Scrivener there, transfer that title into our names. And last, step eight, successfully get the keys. Hell yeah, Joey, it's taken six months, but we, I think we officially had this house.
Speaker: Yeah, six months from brainstorming for our first discussion about the idea to picking up the keys. Pretty cool. Pretty excited to go to some of these hot springs. Hell yeah. Again, we're recording in, in Montenegro bar. We are too, this is our first time doing this. Again, don't take this as professional or financial advice. We're just two foolish mortals. These are the steps we've learned throughout this podcast. We'll talk a little bit more about.
Speaker: from getting the keys or even going back and looking about where the pain points are. I would say it was a relatively easy process, but it does take a long time. Just know that this isn't America. This isn't Canada. Japan has this process and we have to be patient. That was something that I think I really had to channel. I'm an eager beaver when it comes to buying things and whatnot.
Speaker: So it did take a lot longer. And then Joey, any final thoughts? I, it's doable is what I want to say. The process is totally manageable, way easier than you think. Enjoyable to learn about Japanese real estate. I think if you're even slightly interested in it, it's not that hard to make the dream a reality.
Speaker: Yep. Again, we didn't know what we were doing. This was a learning process for us. Your steps could be really different than ours, but I bet you, if you're in a similar boat as us, foreign investors, buying in cash, this was really how it went for us. And we hope to dive into each one of these topics later in this podcast. And we hope you learned something and feel free to reach out if you have any questions. Episode one in the books.
