Making the Final Decision to Purchase
8-1 What to consider when applying for purchase
Once you have decided on the property you want to buy, before making an offer to purchase, double-check that the property meets your requirements and that there are no problems before making an offer to purchase.
Proceed with the transaction carefully, referring to the following points when making an offer to purchase.
Once you have decided on the property you want to buy, before making an offer to purchase, double-check that the property meets your requirements and that there are no problems before making an offer to purchase.
Proceed with the transaction carefully, referring to the following points when making an offer to purchase.
Point 1: Decide on a property to purchase and make an offer to purchase.
Once you find a property you like, discuss terms and conditions in detail. Do not hesitate to ask the real estate company for information you would like to know about the property, and also thoroughly check the property and confirm any points of concern during the site visit. While consulting with the real estate company, make your desired purchase conditions specific. Once the basic conditions have been established, present the conditions to the seller and make an offer to purchase.
At this stage, basic conditions such as the desired purchase price and desired delivery date are often presented first. However, if there are other prerequisites for the purchase in addition to the basic conditions, they may be presented. In the case of a used property, you may also request for repairs to the property.
At this stage, basic conditions such as the desired purchase price and desired delivery date are often presented first. However, if there are other prerequisites for the purchase in addition to the basic conditions, they may be presented. In the case of a used property, you may also request for repairs to the property.
Point 2: What is the process from purchase application to negotiation?
The negotiation process after submitting an offer to purchase differs between new properties for sale and used properties.
For new properties for sale
Generally, applications to purchase a new property for sale are made at the local sales office. When offering to purchase a property, you are often required to pay what is known as an "application deposit" (approximately 50,000-100,000 yen).
The application deposit is paid to show that the intention to purchase is genuine (i.e., that it is not a "pretense"), and when the contract is executed, it is applied to the deposit and the purchase price of the property.
However, the legal nature of the application deposit is not always clear, and there are many troubles surrounding its return. Therefore, if you are asked to pay the application deposit, be sure to confirm the handling of the application deposit and receive a certificate of deposit, etc. that states the purpose of the money transfer (that the money was transferred as the application deposit), the amount, and the date of payment.
After paying the application deposit and submitting an application to purchase, you will proceed with the specific procedures up to the purchase, such as confirming property information and contract terms in more detail.
Generally, applications to purchase a new property for sale are made at the local sales office. When offering to purchase a property, you are often required to pay what is known as an "application deposit" (approximately 50,000-100,000 yen).
The application deposit is paid to show that the intention to purchase is genuine (i.e., that it is not a "pretense"), and when the contract is executed, it is applied to the deposit and the purchase price of the property.
However, the legal nature of the application deposit is not always clear, and there are many troubles surrounding its return. Therefore, if you are asked to pay the application deposit, be sure to confirm the handling of the application deposit and receive a certificate of deposit, etc. that states the purpose of the money transfer (that the money was transferred as the application deposit), the amount, and the date of payment.
After paying the application deposit and submitting an application to purchase, you will proceed with the specific procedures up to the purchase, such as confirming property information and contract terms in more detail.
For used properties
In the case of used properties, the application for purchase (presentation of basic conditions) is often made in the form of a document called a "certificate of purchase" or similar document, which is given to the seller through the real estate agency.
A certificate of purchase is a document signed and sealed stating the basic terms of purchase, such as the desired purchase price, payment terms, and desired delivery date, and is a request for the start of preferential individual negotiation, based on the specific purchase desire, "I want to buy this property under these terms and conditions. Note that in the case of used properties, payment of an application deposit, etc., is generally not required.
Subsequently, if the seller, based on the conditions presented by the prospective purchaser, determines that a contract is viable, formal individual negotiations will begin. Since the seller narrows down the negotiating parties to some extent at this stage, it is important to proceed with subsequent negotiations in good faith. In individual negotiations, differences in terms and conditions between the two parties are adjusted, and more specific terms and conditions are determined.
In the case of used properties, the application for purchase (presentation of basic conditions) is often made in the form of a document called a "certificate of purchase" or similar document, which is given to the seller through the real estate agency.
A certificate of purchase is a document signed and sealed stating the basic terms of purchase, such as the desired purchase price, payment terms, and desired delivery date, and is a request for the start of preferential individual negotiation, based on the specific purchase desire, "I want to buy this property under these terms and conditions. Note that in the case of used properties, payment of an application deposit, etc., is generally not required.
Subsequently, if the seller, based on the conditions presented by the prospective purchaser, determines that a contract is viable, formal individual negotiations will begin. Since the seller narrows down the negotiating parties to some extent at this stage, it is important to proceed with subsequent negotiations in good faith. In individual negotiations, differences in terms and conditions between the two parties are adjusted, and more specific terms and conditions are determined.
Point 3: Is it possible to withdraw after application?
It is possible that after an application for purchase (presentation of basic terms and conditions), the buyer may wish to withdraw the application due to disagreement on various terms and conditions after specific negotiations have been conducted. In such a case, it is generally possible to withdraw the application as long as a purchase agreement has not been concluded. In addition, an application deposit, if paid, will be refunded.
However, you should keep in mind that the seller, especially of a pre-owned property, has begun individual negotiations based on a certain degree of likelihood that a contract will be concluded. Be very careful when withdrawing your application, because if you are found to be dishonest, you may have a problem with the seller.
However, you should keep in mind that the seller, especially of a pre-owned property, has begun individual negotiations based on a certain degree of likelihood that a contract will be concluded. Be very careful when withdrawing your application, because if you are found to be dishonest, you may have a problem with the seller.
8-2 What to Check in the Important Points Explanation
Before signing a contract, an "important points explanation" is always given. Important points regarding the property to be purchased and the terms and conditions of the transaction are explained. It is important to understand the details before making a final decision on whether or not to purchase the property.
Before signing a contract, an "important points explanation" is always given. Important points regarding the property to be purchased and the terms and conditions of the transaction are explained. It is important to understand the details before making a final decision on whether or not to purchase the property.
Point 1: What is an important points explanation?
The Real Estate Brokerage Act stipulates that a real estate company must provide an important points explanation regarding the property to be purchased to the prospective buyer before concluding a sales contract. An explanation of important points must be given orally by a licensed real estate agent after he/she has signed and sealed a written document describing the contents and given the document to the client.
It is possible that you may decide not to purchase the property after receiving the explanation of important points, so it is important to receive the explanation of important points at an earlier stage. After receiving an explanation, you will want to take sufficient time to consider the matter and resolve any questions before signing the contract. For this reason, it is advisable to confirm in advance with the real estate agency the schedule for the important points explanation and the sales contract. There tends to be little time to consider the situation in the final stage of negotiations related to buying and selling. Make sure to set aside enough time in the schedule so that you can make a final decision after careful consideration.
It is possible that you may decide not to purchase the property after receiving the explanation of important points, so it is important to receive the explanation of important points at an earlier stage. After receiving an explanation, you will want to take sufficient time to consider the matter and resolve any questions before signing the contract. For this reason, it is advisable to confirm in advance with the real estate agency the schedule for the important points explanation and the sales contract. There tends to be little time to consider the situation in the final stage of negotiations related to buying and selling. Make sure to set aside enough time in the schedule so that you can make a final decision after careful consideration.
Online (IT) Explanation of Important Points
An explanation of important points is required to be provided orally by delivering a document signed and sealed by a licensed real estate agent. However, when certain requirements are met, a non-personal explanation using "IT" (computers and other terminals) such as videoconferencing is now considered the same as a face-to-face explanations of important points. In order to implement an IT explanation, the following four requirements must be met.
An explanation of important points is required to be provided orally by delivering a document signed and sealed by a licensed real estate agent. However, when certain requirements are met, a non-personal explanation using "IT" (computers and other terminals) such as videoconferencing is now considered the same as a face-to-face explanations of important points. In order to implement an IT explanation, the following four requirements must be met.
- Conduct in an IT environment that allows two-way communication (between the real estate transaction agent and the customer).
- Send (to the customer) a copy of the important points explanation in advance.
- Before the explanation of important points begins, the licensed real estate agent confirms that the consumer is ready to receive the explanation, including in an IT environment.
- Confirm that the customer can see the real estate agent's license on the screen.
Point 2: The important points to check
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A licensed real estate agent will sign and seal the document, provide the document, and give an oral explanation. |
1. Basic confirmation before receiving an explanation
A licensed real estate agent provides a written document and a verbal explanation.
2. Basic property checks
A licensed real estate agent provides a written document and a verbal explanation.
2. Basic property checks
- Has the property been identified?
- Are the rights (mortgages, etc.) organized?
- Are there any restrictions on the use of the land?
- Will the building be built as planned?
- Will there be any expenses incurred?
- Is the water supply and other infrastructure in place?
- Are there any special requirements such as private roads, etc.?
- Are there any other restrictions on the use of the property?
- Are there any other costs incurred?
- What are the rights?
- What are the rules for building use, repair and management?
- Is the contract appropriate?
- Is there a money loan arrangement?
- Are there any other items to be checked?
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prospective buyer
"I have confirmed and understood what has been explained to me."
"I have confirmed and understood what has been explained to me."
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The conclusion of the sales contract |
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Point 3: What is a notice?
In the transaction of an used house, the past history and hidden defects of the house may become an issue, but there is a limit to what a real estate company can understand about all of these matters that are originally known only to the seller or owner. Therefore, many real estate companies ask the seller to submit a written notice (a written confirmation of incidental facilities and property conditions), conduct a property investigation based on it, and reflect it in the explanation of important points.
Guidelines Concerning Notification of Death of a Person by a Real Estate Agent
When a real estate agent is aware of a person's death and believes that it will have an important influence on the decision to conclude a contract for a real estate transaction, it is necessary to notify the customer of this fact. However, each person has his or her own view of death, and the degree to which it affects his or her judgment of the contract differs. Therefore, in October 2021, the Ministry of Land, Infrastructure, Transport and Tourism (MLIT) compiled the "Guidelines for Notification of Death of a Person by a Real Estate Agent."
It provide guidelines on the extent to which real estate agents should investigate the death of a person and the extent to which they should notify the prospective buyer of the death of a person. The guidelines state that real estate agents should investigate the death of a person by asking the seller to include it in the "notice" and that they are not required to investigate the death of a person by asking around the neighborhood or researching on the Internet.
Regarding notification in sales transactions, the law states that notification is not required for "natural death or unforeseen death in daily life (natural death such as senility, death from illness due to chronic disease, or accidental death such as a fall or aspiration)." However, even in such cases, notification is required if the property has been left unattended for a long period of time, and if special cleaning such as deodorization and disinfection or major renovation has been performed. In the case of an incident occurring in a neighboring dwelling unit of the subject property or in a common area that is not normally used, no notification is required. However, it is necessary to give notice in cases where the death of a person is an incident or has a significant social impact, or when it is considered to have an important influence on the decision to conclude a contract.
In the transaction of an used house, the past history and hidden defects of the house may become an issue, but there is a limit to what a real estate company can understand about all of these matters that are originally known only to the seller or owner. Therefore, many real estate companies ask the seller to submit a written notice (a written confirmation of incidental facilities and property conditions), conduct a property investigation based on it, and reflect it in the explanation of important points.
Guidelines Concerning Notification of Death of a Person by a Real Estate Agent
When a real estate agent is aware of a person's death and believes that it will have an important influence on the decision to conclude a contract for a real estate transaction, it is necessary to notify the customer of this fact. However, each person has his or her own view of death, and the degree to which it affects his or her judgment of the contract differs. Therefore, in October 2021, the Ministry of Land, Infrastructure, Transport and Tourism (MLIT) compiled the "Guidelines for Notification of Death of a Person by a Real Estate Agent."
It provide guidelines on the extent to which real estate agents should investigate the death of a person and the extent to which they should notify the prospective buyer of the death of a person. The guidelines state that real estate agents should investigate the death of a person by asking the seller to include it in the "notice" and that they are not required to investigate the death of a person by asking around the neighborhood or researching on the Internet.
Regarding notification in sales transactions, the law states that notification is not required for "natural death or unforeseen death in daily life (natural death such as senility, death from illness due to chronic disease, or accidental death such as a fall or aspiration)." However, even in such cases, notification is required if the property has been left unattended for a long period of time, and if special cleaning such as deodorization and disinfection or major renovation has been performed. In the case of an incident occurring in a neighboring dwelling unit of the subject property or in a common area that is not normally used, no notification is required. However, it is necessary to give notice in cases where the death of a person is an incident or has a significant social impact, or when it is considered to have an important influence on the decision to conclude a contract.