10 Checks Before Buying a Resale Property in Japan
Do not judge a resale property by price alone
Location, floor area, age and asking price are obvious starting points, but buyers should first investigate matters that cannot easily be changed after closing. This is particularly important for condominiums. A renovated unit may look attractive while the condominium association has inadequate reserves, major repairs approaching or restrictions that materially affect future use and resale value.
Ten items to check before signing
- Registered owner, mortgages and other registered rights
- Ownership or leasehold status of the underlying land
- Differences between registered and advertised floor area
- Management fees, repair reserves and outstanding arrears
- Long-term repair plan and history of major works
- Building rules concerning leasing, pets and permitted uses
- Property tax and other recurring ownership expenses
- Seismic standards, building approvals and alteration history
- Flood, landslide and other hazard information
- Leaks, equipment defects, incidents and disclosure matters
Japanese real-estate transactions include a statutory explanation of important matters by a licensed real-estate professional, and the Ministry of Land, Infrastructure, Transport and Tourism permits qualifying explanations to be conducted online. That process should not replace the buyer’s own review. Documents should preferably be obtained before the signing date so questions can be resolved without time pressure.
Calculate total acquisition and ownership cost
The purchase budget should include brokerage fees, registration expenses, taxes, financing costs, insurance, management fees, repair reserves and renovation. For an investment property, gross rent is not profit: vacancy, management, repairs and taxes must also be considered.
What to obtain next
Key documents may include the property registry, condominium management report, building rules, long-term repair plan, association meeting minutes, property-tax documents and property condition disclosure. Good due diligence is therefore not merely finding reasons to buy; it is systematically checking whether there is any reason not to buy before becoming legally committed.