Buying a Resale Condo in Japan, Step by Step: From Viewings to Contract to Handover

The short answer: seven steps, several months, and two steps before the contract matter most

Buying a resale condo in Japan generally involves seven steps: choosing an agent, viewings, submitting a purchase offer, receiving the important-matters explanation and signing the sales contract, the final mortgage review and loan agreement, settlement and handover, and the paperwork after handover ^[1]. From the start of your search to moving in, the process usually takes several months or more ^[1]. The two steps that deserve the most attention come before the contract: hearing the important-matters explanation, and checking the price, handover date, termination terms and mortgage contingency in the sales contract, because backing out after signing becomes costly ^[2]. Below we go through what happens at each step, what the law requires, and how much time to allow.

Step 1: Choose an agent and sign a brokerage agreement

Most resale condos are listed by a licensed real estate broker (takken gyosha) acting for the seller, and buyers normally view properties and negotiate through a broker as well. Tokyu Livable's buying guide suggests consulting several companies first and then narrowing down to specific properties ^[1].

You sign a brokerage agreement with the agent. Article 34-2 of the Real Estate Brokerage Act requires a broker who concludes a brokerage agreement for a sale to promptly prepare a document setting out the statutory items, sign and seal it, and give it to the client ^[2]. If the agreement is an exclusive one that bars you from also using other brokers, its term may not exceed 3 months; a longer term is treated as 3 months ^[2]. When you receive the document, check the amount of the brokerage fee and when it is payable.

Step 2: Viewings, and checking how the building is managed

When viewing a resale condo, look not only at the unit but also at the common areas and the state of management, future repair risk and the surrounding area ^[1]. The same guide notes that the first major repair of a resale condo is often done by around year 15 after completion, and the second typically at years 26 to 30 ^[1]. During viewings, ask the agent for the management fee, repair reserve and long-term repair plan so you know what stage the building is at.

Step 3: Submit a purchase offer and get mortgage pre-approval

Once you find a unit you like, you submit a purchase offer letter (kaitsuke shomeisho) to the seller through the agent, stating your price and main conditions. It expresses your intention to buy but is not yet a legally binding contract ^[1]. If you will use a mortgage, this is the time to apply for the bank's preliminary review. According to Sumitomo Mitsui Banking Corporation, the preliminary review is a simple check of repayment capacity based on basic documents such as ID, and results usually come within a few days, or about a week at most, of applying ^[4]. Having a pre-approval in hand also makes your position stronger in negotiations ^[1].

Step 4: The important-matters explanation, then the sales contract

When terms are agreed, you move to the contract. Before it, the broker must have a licensed real estate transaction specialist (takken-shi) give you a written statement of important matters and explain it. This duty is set by Article 35 of the Real Estate Brokerage Act and must be performed before the contract is concluded ^[2]. When explaining, the specialist must show you their license card ^[2].

After the explanation you sign the sales contract and pay the deposit (tetsukekin) ^[1]. Once the contract is concluded, the broker must promptly give you a document setting out the statutory items, which include the price and the timing and method of payment, the handover date, when the transfer registration will be filed, any termination provisions, and what happens if the loan arranged for the purchase is not obtained ^[2]. That last item is the mortgage contingency clause, and Tokyu Livable advises confirming at signing that the contract includes it in case the final loan review fails ^[1].

Buyers who live far away or overseas do not necessarily have to attend in person. From 30 March 2021, the Ministry of Land, Infrastructure, Transport and Tourism began full operation of online important-matters explanations by video conference for sales transactions, treating them like face-to-face explanations when certain requirements are met ^[3]. The Act also allows the written statement to be provided electronically with the buyer's consent ^[2].

Step 5: Final mortgage review and the loan agreement

After the contract, you apply for the bank's final review, submitting documents such as the sales contract and the important-matters statement ^[4]. The final review looks in detail at the property, your health and enrolment in group credit life insurance (danshin), and takes about 1 to 4 weeks ^[4]. Once approved, you sign the loan agreement (kinsho keiyaku) with the bank ^[4][1]. In SMBC's description, the loan is typically disbursed about one week after the loan agreement is signed ^[4].

Step 6: Settlement and handover

Once the loan is formally approved, buyer and seller fix the handover date ^[1]. On that day a judicial scrivener and the agent attend and check both parties' identity and the documents needed for registration. When the scrivener confirms everything is in order, the bank releases the loan, the buyer pays the seller the balance of the price after deducting the deposit, and receives the keys the same day. The scrivener files the ownership transfer registration that same day ^[1]. Disbursement, registration and handover are usually done on the same day ^[4].

Property tax, the management fee and the repair reserve are also settled between the parties that day ^[1]. There is no legal rule for apportioning property tax; it is set by agreement in the sales contract and is usually calculated per day. The reference date is commonly 1 January in the Kanto region and 1 April in the Kansai region ^[5]. If you are buying in Osaka, check before signing which date your contract uses.

Step 7: Paperwork after handover

When registration is complete, the registration identification notice issued by the Legal Affairs Bureau arrives later by post; keep it in a safe place ^[1]. You also file a notice of change of unit owner with the building's owners' association, so that management fee debits and notices of owners' meetings come to you ^[1].

What this means for buyers: build in time

Putting the bank's published guidance together, the preliminary review takes a few days to a week, the final review 1 to 4 weeks, and disbursement about a week after the loan agreement ^[4]. Add viewings, negotiation and contract preparation, and a process of several months is normal ^[1].

Read the two pre-contract documents line by line. The important-matters statement and the sales contract are the most binding documents in the whole process ^[2]. Confirm the payment schedule, handover date, termination terms and mortgage contingency before you sign.

Match the mortgage contingency deadline to the review period. The final review alone takes 1 to 4 weeks ^[4], so a contingency deadline that is too short may not leave enough time.

Overseas buyers can use online explanations, but should allow time for documents. Online important-matters explanations are now in full operation ^[3]. Registration documents and identity papers for settlement day still need to be prepared in advance, so it is best to confirm the document list with the agent and the judicial scrivener when you sign the contract.

Summary

The process of buying a resale condo can be summed up as: choose an agent, view, make an offer, receive the important-matters explanation and sign the contract, pass the final loan review, settle and take handover, and complete the post-handover paperwork ^[1]. The key legal points sit around the contract: the broker must have a licensed specialist explain the important matters in writing before the contract is concluded, and afterwards must give you a document covering the price, handover, registration, termination and mortgage contingency ^[2]. The bank's reviews and disbursement set the overall timetable ^[4]. If you are considering buying in Osaka, please contact us. We will guide you through each step in Chinese and explain the important-matters statement and the contract item by item before you sign.