Buying a home is one of the biggest purchases in life. To turn that goal into reality, it is essential to understand the right process and the key points that require attention. This article explains the path from financial planning to handover, along with checkpoints that can help you avoid regret after the purchase.
What does the home-buying process look like?
Step 1: Financial planning and information gathering
Start by setting your budget and running a mortgage repayment simulation. If you establish your spending limit in advance, it becomes much easier to narrow down the conditions for your property search. Organize your priorities, including preferred area, price range, layout, size, and surrounding environment, before you begin looking for properties.
Step 2: Viewing the property or land
Once you have narrowed down your options, move on to an in-person visit. It is advisable to bring a measuring tape and check ceiling height, storage space, and window dimensions yourself. Confirming factors such as nighttime darkness and traffic volume can also help prevent disappointment after move-in.
Step 3: Application and mortgage pre-approval
If you find a property you like, the next step is to apply. Be sure to confirm that there are no concerns in the contract terms, such as the handover timing or defect liability provisions. At the same time, you should proceed with the mortgage pre-approval review.
Step 4: Final mortgage review
The final review requires documents such as a residence certificate, seal certificate, and tax certificate. Prepare them as early as possible. If the final review is not approved, the sales contract becomes void under the mortgage contingency clause.
Step 5: Sales contract
The formal contract is signed after the final review has been approved. Receive the important matters explanation from a licensed real estate transaction specialist, and sign and affix your seal only after you fully understand the contents.
Step 6: Final walkthrough and handover
Check that the finished building matches the contract and confirm any concerns immediately. Taking measurements with a tape measure during the walkthrough is also useful when planning furniture and appliance purchases.
What should you watch out for when buying a home?
Carry out a home inspection before signing the contract
A home inspection is a service in which an independent third party visually checks the condition of the building. The typical cost is around JPY 50,000 to 80,000, and it allows you to identify construction defects or deterioration in advance. Having it done before signing the contract is a basic rule.
Cancellation after signing the contract is generally not possible
If the buyer cancels after the sales contract is concluded for personal reasons, the deposit will be forfeited as a penalty. In some cases, additional damages may also be claimed, so it is important to think through the decision carefully before signing.
Related reading
- What is real estate purchase and resale? A thorough explanation of the differences from brokerage, including the advantages and disadvantages
- Understand your home’s fair price with AI real estate appraisal | When to sell and tips for achieving a higher sale price
- Reduce risk with a second opinion on real estate investment | How expert advice helps prevent costly mistakes
Frequently Asked Questions (FAQ)
Q. What is the difference between mortgage pre-approval and final approval?
Pre-approval is a preliminary check of whether borrowing is likely to be possible, while the final review is a detailed screening for the lender’s formal decision. Even if pre-approval is granted, final approval can still be denied, so you should review the mortgage contingency clause carefully.
Q. Is a home inspection mandatory?
No, but it is effective for identifying construction defects. The cost is typically around JPY 50,000 to 80,000, which can be seen as a reasonable expense for peace of mind compared with the purchase price.
Q. How much should I prepare for the deposit?
As a general guideline, 5% to 10% of the purchase price is common. If the buyer cancels after signing the sales contract for personal reasons, the deposit will not be returned.
Q. What should I check during the final walkthrough?
Check the quality of the building finish, whether there are scratches, stains, or distortion, any differences from the contract, and whether the equipment works properly. Measuring key areas with a tape measure will also help with planning for daily life after move-in.
