1. Property sourcing and acquiring
When sourcing and acquiring a property, it is recommended to appoint a “Buyer’s” agent to represent you on your behalf as many real estate companies in Japan represent the Seller; thereby to avoid conflict of interest it is common to have a broker/agent for both the buyer and seller.

2. Submit application (Letter of Intent – LOI)
A non-binding LOI is submitted to convey to the Seller “intent” to acquire the property.

3. Legal and contractual issues regarding the acquisition of the property.
A licensed agent working for a licensed real estate company will deal with all contractual and legal issues pertaining to the property acquisition. A lawyer is not necessary for property transactions in Japan.

4. Signing of contract
At this step, the down payment will be paid, which will vary from 5-20% of the acquisition price and a binding contract is signed.

5. Apply for loan
When applying for a loan, the bank will require a copy of the signed contract and documents related to the property. a. The fees for a loan are as follows: stamp duty, loan arrangement fee, loan insurance fee, fire insurance, and earthquake insurance.

6. Closing and Payment of the balance
At close after loan is approved and remitted to Buyer’s account, the remainder of the purchase and sales price is paid and deal is closed. At close a scrivener will file for transfer ownership title. The new deed will arrive in 10-14 days.

7. Closing and Registration Fees
The payment at close and for property registration are as follows: registry license tax, scrivener’s fee, property investigator’s fee, and realtor’s commission which is 3% of the purchase and sales price. Total closing fees including registration and (5a) above will be approximately 5-7% of the purchase and sales price.

8. One time and Annual Taxes
After closing, within 3 months a one time payment for real estate acquisition tax is issued, and annual fixed property and land tax, and city planning tax will be mandatory.

NOTE: The above are the 8 basic steps from origination, acquisition and closing on a property. However, it is recommended that you appoint the agent will also conduct property due diligence on the property to be acquired.