How to buy a mansion with cash?

[HankNeva]

Hi...I know the simple answer is give the owner some money and sign some papers with the government for ownership. My main question would be whether I need a realtor or lawyer to help with the process or not. If so, what specifically would I need this person's help with, and what would I need to pay this realtor/lawyer.

I recently paid off my mansion and had to go through a big paperwork hassle moving the ownership from the bank to me, but I was able to do that on my own. I wonder if there are any other things I need to do on the govenment side? Sales tax, et. when buying a home or mansion with cash.

Here are the steps I can imagine:

1) Decide on a price and a moving out date with the owner (he is someone in my buildiing that I trust). He is not in a hurry and neither am I.
2) Give him a downpayment to secure the deal of maybe 10% and get a signed note back from him saying he has received the money as a deposit on the the total price which is also written down as is the moving out date.
3) Pass along the 90% when I get the keys to the place and he is out.
4) Register the change of ownership with the local tax office.

I wonder how this would typically work in Japan? Would Japanese skip the note in Step Two and just go with word of mouth? Though I trust this person it seems risky. When I read the above, i get the feeling I shouldn't just do this myself and need a pro to help. Maybe there are specific forms that realtors and banks use in this situation to protect buyers and sellers that would be good to use.

I wonder if any of you on this forum have done this and ran into any troubles or have advice on how to best buy a mansion or house with cash.
Thanks!

[Isodora]

I am not quite sure if the property you mentioned first, was one in Japan, if yes you know the process, if no:

I am not experienced with privately arranged transactions of property and would likely refrain from it.

While the route via a real estate agent is a bit more costly, (a certain percentage of the price maybe 3%?) it saves you a lot of work and headache. More so as the process differs a bit from that in our various home countries.

In any case, the one part you cannot skip is the notary registration by a 司法書士 who then issues a certificate that the property is now yours: 登録済権利証 - this also against a fee of course, which could be in the range of a few hundred thousand yen. (The registration process is based on the
“Building Lots and Buildings Transaction Business Act” law.)

The certificate is your proof that the property was rightfully transferred.

Property transactions are a bit complicated and time consuming for a reason.

[HankNeva]

Thanks...Yes, this question is about buying a property here in Japan with cash instead of using a bank nor a realtor.

[ClearAsMud]

Maybe there are specific forms that realtors and banks use in this situation to protect buyers and sellers that would be good to use.

Well, the specific forms that are used are simply contracts, which individuals are free to draw up themselves (個人間売買). Templates and guides for such personal sales of property can be found online, but if you want to make absolutely sure everything has been covered, you could ask a legal scrivener to draw up the contract for you. It's not legally necessary to draw up a written contract for person-to-person cash sales, but having a written contract reduces the chances of disputes over just what was agreed to (including what happens if either party backs out, or if major defects are discovered before the property is transferred, or if the seller doesn't hand over the property on the agreed date). Also, having documentary evidence of the sales price will stand you in good stead later (you wouldn't want to be without such evidence at inheritance time).

Hiring a scrivener directly would be much better than going through a realtor, who would not only take a realtor's fee but would charge you for hiring a scrivener anyway. You could ask a scrivener for an inclusive quote that would include registering the transfer in ownership, which is the usual path people take. Scriveners' fees for preparing a property-sales contract appear to range from 10,000 to 50,000 yen. Asking the scrivener to handle document-collecting and property registration as well would cost more (although the "few hundred thousand yen" mentioned in the other post sounds on the high side), but things would get done smoothly and properly. As long as you're willing to put in the time and effort to handle all the form-filling and filing, it is possible to handle the entire process yourself, although you need the language ability to sift through all the Japanese information that exists and handle official formalities. But even if it's a simple self-made one, you really should draw up a contract (which is where any down payment would also be mentioned). Beyond that, it's up to you to decide how much professional help to enlist.

By the way, you don't register the transfer with the tax office but with the legal-affairs bureau (法務局), which is the government office that issues the official notification of ownership, known as 登記識別情報通知 (the登記済権利証 mentioned in the other post -- officially just 登記証 -- was discontinued in 2005 and replaced with a type of password system that enables online registration). A scrivener who provides you with the notification information is acting as your intermediary and is not the issuing authority. If your seller took ownership of the property before 2005, I believe that his/her 登記証 would be necessary (if it's been lost, you have to prove your identity in some other way and pay a significant fee to do so), but after registration, the buyer would be issued an official notification, either directly or via a scrivener. It's this information that identifies you as the rightful owner and should help make future transactions easier. Since you'd be paying in cash, the only interaction you'd have with the tax authorities would be paying the real-estate acquisition tax (actually a local tax that you will be sent a notification to pay after notifying the prefecture of your purchase within the required deadline) and replying to a possible inquiry regarding the source of the funds used to make the purchase.

[Edited to clarify the need to pay real-estate acquisition tax and emphasize that I am no doubt unaware of many other essential considerations.]

[HankNeva]

Thanks...That's good information. It sounds like going with a legal scrivener is good idea. It is not a term I'm familiar with so I did a google search and came up with "judicial scrivener" (shihoushoshi) and "administrative scrivener" (gyouseishoshi). Would either of these be appropriate for real estate?

[ClearAsMud]

Yes, "judicial scrivener" is the correct term for 司法書士, and although both can prepare private legal documents, only judicial scriveners can actually carry out registration procedures at the legal-affairs bureau, so they would probably be better suited to drawing up contracts related to the sale of real estate. Only administrative scriveners (行政書士) are able to submit applications to government agencies for the purpose of licensing and obtaining government permission (so when "immigration lawyer" is used, the reference is usually to an administrative scrivener). Basically, judicial scriveners for registrations and administrative scriveners for permits, although some functions overlap.

[HankNeva]

Ok...Judicial Scrivener it is. Thanks!

[DragonAsh]

ClearAsMud has got you covered.

I have purchased three properties in Japan (and one in the UK in cash. In Japan, at least, you do not need a realtor, although I recommend one - specifically, I recommend you find a realtor you can buy a property from. Realtors often also own properties, and when/if you find one such property they want to sell, not only do you have a realtor that will know what the process is, and they can hire the Judicial Scrivener to get the legal documentation in place, if it's the realtor's property you don't pay the broker's fee.

Once you find a neighborhood you want to purchase in, spend a bunch of time walking around, at different times of day, etc, and hit every single real estate agent in the area. Be patient; don't rush it. You can save anywhere from 3-6% of the purchase price of the home if yo're patient.

[Wales4rugbyWC23]

Ok...Judicial Scrivener it is. Thanks!

Solicitors for Brits and Aussies.

[Deep Blue]

Ok...Judicial Scrivener it is. Thanks!

Solicitors for Brits and Aussies.

Conveyancer I think.