Tokyo house

Buying a house in Tokyo

We have been thinking about buying our own place for a while, just wasn't sure where. It could be when we move back to New Zealand, or, perhaps some other country (a few offers have popped up), and maybe Tokyo itself. We have lived in an apartment in Tokyo for about 13 years, and that has been great. But it would be nice if it was *ours*.

I have been keeping an eye out on the realestate home pages, just to see what is available. We were looking for something around 4LDK, so that the boys can have separate rooms. A stand-alone house would of course be very nice, but also checked a few apartments and mansions. (Japanese mansions are not mansions!)

In March 2015 we asked to see a couple of houses, one in particular stood out to us. I had seen it on the market for a while (over a year at least), it is 131m^2 land, and 220m^s inside, so you know it is expensive! Quite a bit outside our budget, maybe if it was half price! It was full of furniture and garbage, apparently the previous owner had not managed to keep up with the payments, and the bank foreclosed. But that is an interesting thing, almost all places we looked at to buy, where "not clean". "Would it have killed you guys to at least vacuum?". That is talking about the places that were empty. It seems the Japanese always "remodel" after they move in, so cleaning isn't paramount?

One interesting thing that popped up when discussing the financials of the very expensive place, they mentioned the realtors fee, and the fee to the bank, and then "you will need to give a couple of million gift to the previous owner". Wait, what? Clearly I feel for the previous owner, but that is peculiar? I, the buyer, have to give a gift of money, to the guy who could not pay his mortgage and it was foreclosed? Clearly, I know nothing about realestate.

It is also common for the realestate staff to want to pick us up in a car, to take us to the property, even if it is just in our area. I understand that the "customer is king" is important, and so that is part of the service. But sometimes, it was much more convenient for us to cycle over to the property. I also found I enjoyed the challenge of finding the Internet listed properties in an area, by just going on the image and other clues. Good way to get out in the weekends. We were quite lucky that the realtor had someone who spoke in English with us, this was a great relief.

After seeing a (incredibly cluttered) house, which apparently had to pay a fine every month for being over-sized, the realtor popped in to show a bit of land on the way back home...

The land

We had not really thought about looking at land at all, so initially I was not really looking seriously at it. But it had some interesting potential. Off the main road, still near the Odakyu line (as we are already used to), in the same area so the school does not change. Corner lot. Had the typical blue tarp covering it of course, this is Japan after all. 87m^2 land for ~60M yen. This is shibuya-ku so, yeah, expensive.

[land picture]

One thing that is interesting is the new rule about have 4m access road to new houses. (For emergency vehicles). Since the road to this lot (or rather, the house that used to stand there) does not, there is a 2m "setback" on the land where you are not allowed to build. You own the land, but can't place any permanent buildings on the part which is for the 4m access road. So, it feels like you are buying 68m^2 for ~60M yen.

But not really. In Japan, the land comes with two percentages. With this land, it is 60% and 300%. This means that you can build (foot print) on 60% of your land area, which is from the original 87m^2! Ie, about ~54m^2 can occupy the land area. Which is smaller than the 68m^2 with setback. So it is more about where on the land you place your building, in our case, toward the west corner (bottom left on the image). This leaves the setback area for parking our bikes and similar.

The second number, 300%, is the total size you are allowed to build. Ie, when adding floors. As it happens, 3 floors at about 54m^2 is only about half that, so that has not yet been an issue. There is also a sunlight rule, but I'll bring that up later.

When talking financials with the realtor, they explained that if I got an average mortgage for the 60M yen land, the monthly payment would be about 16man yen. (160,000) But, while there is no house on the land, you can pay just the interest on the mortgage, about 4.6man a month. Until the day you move in. You get a second "part" to the mortgage that pays for the house building, and start paying the full amount once you move in. So the system is not completely against you, if you consider buying land and building.

Design

I looked around for a way to design a house, and there are many on the Internet. Some for browsers, from free apps, others to buy etc. But the foreign tools did not really work out. It became clear that I needed to use a Japanese made design program, to get the "standard" sizes of things, like the set bathrooms, stairs, genkan, and all that. Clearly there is a monopoly going on here, as it seems there is just one software, and it was quite expensive for my hobby level interests. So I went a bit more oldskool, and started measuring things at home to get an idea of how much space are needed. Typical Japanese apartment bath/shower room seems to fit in 2m x 2m, and so on.

Eventually, I sent a sketch to the realtor that I had made of what I thought could work on the land we were looking at. Features 2 bedrooms, bath/shower, toilet on 1F, 3 bedrooms and toilet on 2F, the LDK on 3F with small balcony, and rooftop balcony above that.

[my design image]

A couple of days later I received back a proper (Japanese style) floorplan based on my initial sketch. Some interesting differences showed up. I figured that the top floor (3F in our case) would be the LDK area, ie, any awake hour we would spend here, so it should have the better "view" and sunlight. Since the bedrooms are generally only for sleeping, it would seem a waste to have those on the top floor. This doesn't appear to be the mindset here, both designer companies initially put LDK in the middle, and bedrooms at the top. Perhaps there is a reason for it which we will learn one day...

Anyway, we arranged a meeting with the design company. We had no idea what to expect of course. So the realtor is not really connected with the house design, and eventual building of the house. The realtors just help connect us with those companies so we can hash out ideas. It was quite interesting and productive. We could explain some ideas we had behind it, and they could explain why certain things could not be done. Usually load-bearing walls, but also emergency access like that the 3F balcony had to have room for that.

It also showed that the rooftop balcony was "too tall", and that 3F had to be made narrower. We just assumed we had reached some height, and could not have a rooftop balcony.

It was actually a few days later that we finally had it explained to us. There is a sunlight rule in Japan, were you draw a line from the centre of the roads, at some angle I have set to learn, up into the sky. This is why the North and East side of the house (since the roads are North and East) has to have angled roof, and come back in a little. I had placed the rooftop balcony stairs in the east corner which is the worst place for it. Had the stairs been on the South, or West sides, there would have been no issues.

We got a quick estimate at about 20M to build the house, going up to 25M including all the extras, insurance, realtor fees, and stamps. Interestingly, you have to pay a few man yen for a stamp for the land, stamp for the house, stamp for registering the land, stamp for registering the house. Just think of it as lots of small taxes.

After this, we also met with the biggest house builders in Japan, and they showed us their design, and floorplan. Quite different to to my initial, but also some neat ideas. They too placed LDK in 2F, but had no issues moving it to 3F. They had rooftop balcony already, so this is where we learnt it was possible. We had a chance to visit friends who very recently bought land, and built a house, very similar to what we had in mind. Got lots of measurements out of it, so we could better "see" what our designs would be like. Also to practise 2m x 2m stairs. We really loved their rooftop balcony, which is why we started thinking we want one.

The second design was estimate at closer to 30M, but their pricing is based on the building area. In our case, 120m^2. So we can change anything inside and the price is the same. They list the "penthouse" separately, as well as rooftop balcony. The penthouse is the stairs and door part that opens to the rooftop balcony.

It took at least 2 meetings with the first designer before they reluctantly suggested that having the kitchen in the low-ceiling area is probably not the best. Seriously, I'm here for your advice, just tell it to me straight.

We sent back revisions to both companies, for the different floorplans. Apparently, the floorplans and companies have to be kept separate, no sharing between them.

Mortgage

We filled in the paper work for the 2 bigger banks in Japan, it is more of a pre-application to see if they want to talk to you and what sort of numbers we could get. There is no commitment yet. They insisted that I write my name (katekana) and address (kanji) by myself, by hand. I softly suggested they could write the address and I just do my personal details and sign (hanko) it. That was a big nono, had to be me writing my address. Took forever, but got there eventually. Luckily, I had practised my address when I applied for my Permanent Residency.

4 days later we get the news that neither bank wanted to help with a mortgage. With no reason given. I got the impression that if the banks were not happy with me, or my situation, they would give reason. But in this case, it seemed to be about the seller, or something external. Then they can not give reason for liability's sake. At least, that was the gist of my understanding. The realtor may simply have been sparing my feelings. Who knows, we filled in another set of mortgage application forms (again, I had to write) and fired those off.

This time it went better, in that we got an offer and lots of numbers and stats with it.

The next step was to fill in the "purchase approval" for the land, and hanko it. This is not binding either, we can decide not to buy it without any penalty. At this point they want a 3M yen downpayment, which we get back if the mortgage falls through, or we decline to proceed. Has a deadline of a month on it. The realtor is now negotiating with the seller of the land, and dealing with the bank.