Saturday, February 27, 2010

Putting the Design to the Test.

For all the pretty designs we've seen in the numerous magazines, the question that keeps popping up is : "Does the design stand the test of time?"

Fortunately, our friends (family of 6) who rent a 5 year-old home in Suginami were kind enough to give us a tour of their home. The location is 50 meters from Zenpukuji Park (sort of a mini-Inokashira park) and has great southern exposure. The house has 3 floors plus a basement for total usable space of 161sqm.

The home is put on display by the design firm NatureDecor at link below:

Thumbs Up:
The home definitely has a lot of charm:
- Sunken living room with side-angled skylights makes this room the centerpiece of the home. It certainly gives it a WOW factor.
- Walls were made of a mixture of mortar some fibrous material giving a lot of texture the rooms.
- A lot of attention paid to the lighting, exposed beams, artistic hand-rails and nooks for decorative pieces.
- Lots of STORAGE.

Lessons Learned:
  • Basements give you lots of extra space but drainage can be an issue as you need to turn on a pump when it rains. As well, there's the humidity factor. Our friends have 3 or so running during the summer wet season.
  • Beautiful living room, but it does not get used that much as people are usually in the computer/media area, or in the dining room. Some food for thought.
  • How do you clean textured walls? They are pretty but how do you clean water condensation stains?
  • Make sure your builder is nearby and ready to fix things like windows that are improperly installed (e.g. have gaps).
  • Heating: Heated floors don't heat up a room. They feel nice when you're standing over them but we had our fleeces on all evening. Note to self: look into baseboards.
  • Transparent stairs give a sense of more space but you also lose a storage area.
  • Japanese Top loading dishwashers are useless. You can barely fit enough and you need to stack the washers trays on top of each other.
So we learned an awful lot on this "Live the Design" tour, and the above are just off the top of my head.

Thursday, February 25, 2010

Best Steak - Satou Restaurant

Kichi for Meat Lovers.

While I wait for the bank to do it's thing, I thought I would write about my favorite steak house in Japan.

Satou Steak house is 3 minutes walk from Kichijoji Sunroad Exit and is famous for it's quality Japanese steaks (Wagyu) and deep-fried mince meat ball (Menchi Katsu).

The location is really 2 shops in 1. The first floor is a butcher shop where you can order different cuts of beef. It is also where they sell their Menchi Katsu, Chashu (braised pork), and meatballs.
There usually a long queue for the Menchi Katsu and you need to wait about 10 minutes.

There is a side door which leads to the second floor restaurant but it only seats about 16 people.
The best time to go is at lunch where the cheapest lunch set is around 1500yen.
However, they usually have a promotion at lunch where they have a prime cut (usually about 9000 yen) for about 3500yen. Not cheap but the closest to heaven for meat lovers.

I would not try to go with a group larger than four.

See Map for Directions:

Tuesday, February 23, 2010

More Tips on Loans

It pays to shop around. I had a great experience today with the MUFG home loan representative. She was very polite and actually did not act scared to give me a loan.
She patiently helped me fill in the forms and made copies of all the necessary documents I brought with me.

Tip #1: Finally a break for people with kids.
One thing I was not aware of is with regards to the "Big Family" offer they have. Essentially if you have more than 2 kids you are eligible to get 0.1% off your mortgage rate. This applies to campaign rates too so it's not a either or situation. So if you have children, best to ask your bank if they offer any deals such as this.

Tip#2: Delay the start of your loan.
Of course you'll have to live somewhere while you design it and get it build (that process is about 7 months) during which you will need to cover both rent and land mortgage payments. You should ask if there is a way to defer the start of your mortgage to until you've moved in. The maximum you can defer is 12 months. In terms of costs, the estimate I got was about 4% of my monthly mortgage per month. So if you're more mortgage is 20man, 8000yen per month or so. You can get your loan person to provide you the quote. Do note that although the period of the loan is the same, the number of payments is lower and this will slightly impact your monthly payment.

Tip #3: 5 Year Rule on Monthly Payments:
If you choose a floating rate you should ask about the Five-year rule on monthly payments.
The way it works is that your payments are fixed for 5 years and are revised based on the adjustments in the floating rates within those 5 years.

Tip #4 : 25% increase cap on interest Payments:
So what happens if the rate goes from 1 to 10% in the next five years?
Though improbable, in the above scenario your monthly mortgage would not double or triple.
The maximum increase would be 25%.

Hope this helps.

Monday, February 22, 2010

Home Design

The Pile:

The first thing is to get inspired and there's nothing like heading to your nearest library and grabbing whatever you can find on the latest designs. You should be able to take a whole variety of books and magazine that will help you articulate your vision of dream home. They have tittles on building eco homes, natural homes, tatami room specialties, homes under 100 meter square,etc..

Experts mention you need to do this as a first step before going out to look for land. But I like to keep an open mind and did this in parallel. Great designs will make some of the irregular shapes of land efficient and cozy. So it's good to know what's out there.

The HOW-TO books.

The first book on the left-hand side is a great resource for getting a good knowledge foundation on building a home and the numerous options open to you. There's also a special section on how to build a "Low-Cost" home.

The second book is half explanation, half list of check boxes and takes a methodical approach.
The check lists are great for pointing out the little details that are easily forgotten (number of light switches, or electrical outlets, etc).

The gadgets:

So above 2 are great for the general plan of the house. But in reality some of your appliances will dictate the more detailed plan. For example if you want an American Gas-vented dryer (as opposed to the Japanese dryers that just heat your clothes), you'll need to build the air ducts and ensure the counters are wide enough. If you're a gadget fan like I am, it's great browsing some of the latest technologies in the kitchen. MSRP (Manufacturer Suggested Retail Price) are listed for almost all items. In general expect a 30% discount on those prices as your builder will buy direct.
Typically, the larger you buy the larger the discount.

Finding your little piece of land (Pt.2) - Getting a loan

So now you've found that little piece of heaven, are generally happy with price (though in truth like all things in Japan you'll always feel like you've over-paid a little), you trust your agent, you have a good image of what the place will look like. So how do you get a house loan if you're a foreigner?

As a foreigner, you're choices are fairly limited. Basically MUFJ is the only place I know that will give loans to foreigners who do not possess permanent residency (eijuken). Even then they will look at your income level, employer, how long you've been employed, etc before they lend you a dime.

Important to note that you don't necessarily need to have eijuken. As the process takes many months, many banks will accept proof that your application has been received by Immigration.

Once you have permanent residency, the options are more open. Mizuho in my experience has very good service and allows you to add things like furniture and agent fees into the loan. However, it appears they are less willing to lend you over a certain amount than say MUFJ. I would not bother talking to SMBC unless you have 20% down payment ready.

If you make a bid on land it's usually customary to provide of 10% cash while the loan is being approved. If the loan falls through you get your money back. If you decide to back out of your offer for any other reasons you must forfeit the 10%. Many feel slightly uneasy as the money is not actually held in escrow and you have no control over what the owner does with the money while the loan is being processed. Thus many people prefer to have a pre-approved loan.
The process is termed in Japanese as Jizen Shinsa "pre-determined examination". Once you've signed the home contract you must then go through the Seishiki "Formal" shinsa though in theory it should be fairly straightforward if all parameters are unchanged.

Here's a quick breakdown of the paperwork you will need:

- Certificate of Alien Registration (must include all family members)
- Most recent City Residence Tax Appraisal.
- Annual Income Certificate from Employer for the last 3 years.
- Proof of permanent residency application.
- Land cost Estimate
- Building Cost Estimate
- Design Estimate.
- Architectural schematics
- Copy of Land Deed from Real Estate Agent.
- Copy of Land on a map.
- Copy of Land Measurement Survey.
- Copy of any other outstanding loans payment schedules (e.g: car)

Thursday, February 18, 2010

Finding your little piece of land (Pt.1)

As both my wife and I are foreigners, access to real estate information and the purchase process is about 10 times harder to come by.

Some good places to start would be the following:

Much more entertaining:
Danny covers a lot of ground and is way more readable.

What's available and for how much (for the land)?
Below are some the sites I regularly search to get an idea of what's on the market.
Yes they are in Japanese and you will seriously need to ramp up your Japanese or heavily rely on your Japanese spouse/partner throughout the whole process of building your own home, coz that's really the only way to get the best deals.

In my case, I find the best way to find a good agent is to go through friends or relatives that have had good experiences. You'd be surprised how many have built or done renovations. In our case, we've enlisted about 4 agents to turn over about every rock in Kichijoji. We've narrowed it down to 2 agents now and I think we're pretty close to making a bid on a place.

How much for the Agent?
The buyer pays all of the commission on the sale which is (as they will all tell you) 3% plus tax.
So hypothetically, that's 1.5M yen on a 50M yen property which is in my opinion a lot for basically presenting me with a list of about 12 plots of land and a few hours of paperwork. The kicker here is that there is no real incentive for the agent to lower the price as this effectively reduces the total commission he or she receives.

Negotiating the fees.
My suggestion here is to do your homework.
For example, if most people these days are buying, 25M yen homes (0.75M comm) and you're the outlier that is buying the 50M yen, there's a probably a deal to be struck in between.
Similarly, if you the real estate is part of a larger company that also builds home, that is another opportunity to strike a deal. Most Japanese I've heard don't really negotiate on the agent's fee so I've heard so it helps to be very tactful in this department.

Is this land good value?
As everything in Japan, ESID (Every situation is different) but it's slightly easier if you're just buying land as you don't need to assess the value of the building.

Below is a great site that gives the price per square meter of recent deals struck in the area.
It shows price trends going back to 15 years in the past. (I would hate to have bought land in the early 90s!!) and as early as 6 months back. For example, it appears that prices have dropped about 5~10% in the past year.

The next site gives you the assessment from the city for tax purposes.
This is more of reference as you can ascertain the prices fluctuation between 2-chome and 4-chome for example.

Of course, this is just the beginning as other factors as proximity to railway, schools, parks, south facing, corner plot, etc play a factor into the overall price.

More to come...

Tuesday, February 9, 2010

Putting down roots

After 12 years in Japan, the time for putting down roots has finally come. Our family is ready to call Kichijoji "Home". We are taking the plunge and are looking for a place to build a little house. Then there's the silly paperwork involved with getting permanent residency:)

In any case, this blog is meant to be journal of our life in this wonderful town 20 kilometers west of Shinjuku.

For friends or just the curious.

It's not about saving the planet, or some grandiose metaphysical journey.
It's just a simple of collection of our favorite places, food, shops, etc.
Please feel free to share your favorites as well.