It can be daunting when approaching the idea of acquiring a foreclosed property here in Japan. While the process can be confusing to the beginner, it is by no means impossible. ?The following case study examines how to go about the process from front to back.
The Need:
Already 4 years in Japan, Jake was getting tired of renting. He knew the score, throwing money away instead of building equity or at least preserving it. It?s not that he hasn?t owned a property or two before, back in his home country. ?With a another family member soon on the way he was thinking, ?now is the time?. Having being good friends of SleepWell Homes (my company) for some time now and often searched and renovated some properties together, he was positive a foreclosure was the way to go to buy below market value, avoid nasty agent fees, other costs and so on. ?With this mindset Jake started looking to buy a house.
Already a Member:
He was already a LEVEL 2 member of SleepWell Data and together we did some pre bid surveys and analysis of several properties being auctioned. One house in particular, in Kita Ku, Akabane stood out. High on a hill, tree lined view, 8 minutes from a station, plenty of room (124 square meters) for his family to grow, easy train ride to work, from a station boasting 3 lines, with a garage, he could hardly hold his excitement!! ?We followed up with research on the area. Land values in particular since the house was 30 years old but still in excellent condition:
1) There were 2 pieces of land selling in the vicinity. One was 48m2 and selling for 31Million JPY. Jake?s target property has a land area of 121m2.
2) We also knew the area from past investigations and were definite that if this property were advertised in an agent?s window, 35Million JPY would be close to the mark.
3) Furthermore, using SleepWell?s online data analysis tools he ascertained that residential, stand-alone buildings, as opposed to commercial ones, tend to perform worse at auction. They typically receive less tenders and sell for a lower Percentage of Appraisal. This is because the majority of bidders are real estate companies looking for a quick project turn around or high rental income stream. They tend to bid for commercial properties, or apartments since the market is far larger for these type properties.
We came to the conclusion that bids around 127% above their appraisal for properties like this house, being in a strictly residential zone, should win at auction. But since he really wanted this property to live in, he submitted his bid at 132% of appraisal. Jake won the bid!
Entering The Property
After making final payment 5 weeks later, it was now time to get the keys to the property. The previous owner was still living in the property and had done so with his family for the last 30 years. Having had his company fold on him earlier the previous year he wanted his same lawyers to handle the negotiations of vacating the property. We approached the lawyers on several occasions but unfortunately settlement could not be reached and lawful eviction turned out to be the only option.
Seven weeks after final payment, the eviction was held. It was a peaceful affair and access was granted immediately. We changed the locks and commenced clearing the old owners belongings preparing for renovation. The auction result for the property was March 22nd 2012, Final Payment was made 8th May and access to the property was 7 weeks later on June 28th.
FORECLOSURE OPEN DAY
SleepWell is holding an open day for the above property on the 7th of July, 2012. This is a fantastic opportunity for those readers considering purchasing property to see a foreclosure first hand. You can find out more at sleepwellhomes.jp. The event is free but only open to members of SleepWell Data website. (registration is free and easy for LEVEL 1 membership)
Editor?s Note: ?Edward Perkich is the President of Sleep Well Homes K.K., a foreclosure property advisory firm in Tokyo and can be reached at enquiries@sleepwellhomes.jp or via the contact form at www.sleepwellhomes.jp.
Photo Credits: kyle_flemming and?mortgage_foreclosure_solutions?via Flickr Creative Commons
the shins atomic clock daylight savings time john mccain game changer selection sunday corned beef recipe
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.