This is part two in the blog series “Buying a condo in Japan”. Check out part one here.
Part Two Synopsis:
- We have the second meeting
- We are surprised by the initial costs that come with buying a condo even though there was no down payment.
- We reserve the unit by providing income statements, paying the application fee, and filling out some paper work.
Masa’s mother went with us to the second meeting as we thought it would be a good idea to have an actual Japanese person there to make sure everything was legit. During the week prior to the meeting, Masa and I poured over the floor plans and prices, debating which condo unit would work best for us. We eventually settled on the D-model which has a/c installation available for all rooms and was the biggest of all the condos in the building.
The units varied by price by floor (the upper floors were more expensive than the lower floors) and wood color (condo units built with lighter colored wood for doors were more expensive). We chose a mid-level room with darker wood.
During the second meeting we got down to the brass tacks. We went over the cost breakdown of what the condo would cost with a typical Japanese mortgage of 35 years, and went over other fees such as the condo management costs (管理費), the condo savings fund( 積立金) (a fund used for future repairs and renovations), a deposit, processing fees, loan fees, and insurances. All of these extra costs would have to be paid before we moved in. We were attracted to the condo because there was no down payment, but were surprised that we would have to pay 2 million yen ($20,000) upfront. Even Masa’s mother was surprised due to the wording of the “no down payment deal” written on the flyer. Masa and I took a sidebar and discussed if we wanted to take the meeting anything further. We decided yes, just to hear what other steps there would be. We were told that we would have to be screened by a bank to get approved for the mortgage. Once we got approved we would pay the initial charges, sign some contracts, and the condo would be ours.
A list of all of the initial fees. 963, 500 yen ($9,630) would go toward initial fees for the condominium unit, and 885, 500 yen ($8,850) would go toward loan fees.
We got home that night and seriously considered what we should do. Should we go ahead with the down payment even though we were initially told there wasn’t one? After much deliberation we decided to go on ahead with it. The features of the home were too good to miss and the location of the home was great. The down payment of the home wasn’t as much as a typical home in the states would cost us too.
We went back to the office sometime later in the week and signed paperwork that would reserve the unit we chose, and payed a 100,000 yen ($1000) application fee. We also had to provide Masa’s income statements (which we got from city hall) to prove that we could afford the condo.
The condo was one step closer to being ours!
Have questions about the Japanese? Leave a message in the comments.