Wednesday, March 31, 2010

The Timelime (First Quarter)

As promised here's a time line of the process thus far with regards to land acquisition.

  • Research the fudosan websites and decide on 2 main sites to check daily and subscribe to automated email notification when new land are advertised based on my criteria.
  • Decide on and
  • Reach out to many friends who own or have built a home recently in Kichijoji.
  • Get an introduction to a builder which a friend used to renovate her home.
  • First Meeting with Real Estate Agent and Builder (both from S company). Also present is an Architect from I company. We discuss generally about the area, the market, supply and demand, overall process, my expectations and general time frame.
2/6/2010 :
  • Visit the Real Estate agent and get more information about a proposed lot (Lot A). Who is selling it? How long has it been in the market? Why is the owner selling? Any recent price reductions? Is the owner willing to negotiate? Why is cheaper than the other plots?
2/23/2010 :
  • It turns out Lot A has a Toshi Keikaku Doro. There was been a plan for the past 30 years to build an overhead highway directly next to the lot. The land is not exactly on the planned highway thus it is unsure if there would be compensation if it is ever built.
  • After some careful research, the highway plans have changed from overhead to underground. The air vents and exit and junction points are 8km north and south. Some uncertainty surrounding the land but overall I'm ok with it for a good price.
  • According to real estate agent and preliminary discussions, the owner is willing to accept 5% discount on the land.
2/28/2010 :
  • After a week's work of paperwork, MUFJ pre-approves loan at 90% the amount we requested. No clear answer as to what we could do to bump this up.
  • Land owner after consulting a lawyer restates her intention to sell. The new position is the will only sell at the asking price. Is this a negotiating tactic?
  • Call the owner's bluff and submit formal 5% discounted offer.
  • Mizuho pre-approves loan at 95% of requested funds. The one condition is that I pay my car loan in full first.
3/18/2010 : First offer rejected.

3/29/2010: Second offer @99% of asking price = rejected. Real estate agent comes back with an offer to subsidize the 1% difference. Third offer at full asking price = rejected...????

4/3/2010: After all this effort, I met the real estate agent to find out where things went wrong. Did we push too hard? Do we wait for things to cool down and see what happens? Are they at all serious about selling? His answer was basically that he never had an experience where the asking price was not accepted and he frankly questioned the fact whether the owner was in a good disposition to be conducting business. As there are many details that would need to be discussed and agreed, he suggested we don't pursue this lot anymore to save ourselves the anguish. The owner is just not reliable enough.

Another One Bites the Dust..But the Sun also rises

Real bummer week.

We followed up with another option for the north facing piece of land owned by the stepson of te southern lot. To recap, the south facing landowner rejected our original 6% discounted offer. Unfortunately, it turned out he has no intention to sell.

Thus we proceeded with the original owner on Tuesday with a bid worth 99% of the asking price. No go.
In order, to close the deal the agent was willing to take the hit on his commission if we fully met the asking price. We were fine with that as he essentially agreed to subsidize the difference---(their incentive is to get the building contract). So at this point, my overall feeling was that the deal would be done.

Well, I was wrong. The owner refused to sell for reasons still unknown.
Maybe she did not like the negotiating process.
Maybe there are other factors.
I must admit, it's not all too clear when you have an agent who speaks to another agent who speaks to a lawyer who represents the owner. That being said my agent, being more straight-forward than usual, admitted that he felt that the owner was not quite all there.
He is also upset.

Am I disappointed?
Totally gutted. Considering all the research and paperwork. I admit, I was starting to become emotionally attached to our future vision of a home.

So would I do anything differently?
I don't think so.
Negotiation is part of the due diligence process of securing a fair price.
Although disappointed time is on my side and I'm confident some other opportunity will arise.
I'm already revising my land scorecard to see what else is down the list...:)

I will share the scorecard and the time line of events of this latest on my next post. Stay tuned.

Thursday, March 25, 2010

White is BLANK

Alright... so what's up with all the freaking white in Modern Japanese Home Design?

Leafing through countless Japanese Home Design magazines and books, I keep seeing interesting shapes and textures but always in WHITE.

Here's a just a few samples:

So the question is... why???
Is it to make the rooms look more spacious?
Is it cheaper to build?
Does it look cleaner?
Is it the Zen influence?
A rejection of traditional sand colored walls?

For me
White is... hospital rooms, asylums, sterility.
White is...the Great White Expanse that is Canada, a paradox of untouched beauty, birth and beginning but also a representation of distance and loneliness. the color of death in Buddhism. the untouched canvas, indecision and writer's block.
White is blank.

What are your theories and thoughts?

Wednesday, March 24, 2010

Nooks and Crannies

While waiting for the land acquisition process to play out, I'm spending some time envisioning some of the rooms. The above is from "Creating the not so big house" and this corner room is the perfect little cozy nook. In one of our design drafts, there is a small 4.5 tatami room in the North East corner facing a park with some beautiful trees. This would be a perfect fit, functioning as a working study and quiet place to retreat.

There's something about window seating which makes you feel as if the house was embracing you.

Oh yeah. No white walls...must have color in our lives.

Tuesday, March 23, 2010

Home is where the heart is....There is nothing rational about the Heart

I was talking to a mentor at work and we were chatting about building my "First Home". She was really happy for me and totally related to my situation. "Is this a good deal? Will it have good resale value? Is now the right time? etc..."

She shared the best advice she ever got from an expert on residential and commercial real estate. Basically it was along the lines of "Buy a home which you can afford and recognize that the place you will live in is not a financial decision but an emotional one."

This immediately resonated with me and brought things back into focus. I'm buying a home not an asset. In a perfect world, you can get a perfect world. I cherish these little moments of clarity :)

Thursday, March 18, 2010


So supposedly I offended the landowner by calling her bluff and bidding the amount she said she would reject. So first offer @ 6% discount was rejected. No Counter offer. The ray of hope is that there is the plot directly north of it that may be up for sale (owned by her stepson).
We'll knock on that door and see what happens since it's exactly the same size.
Then we'll adjust our bid or walkaway.

Monday, March 15, 2010

The Waiting Game

So I placed my bid on the land about 10 days ago and still no word.
According to my agent we need to wait another 2 ~ 3 days for a response.
Overall, I'm taking this as a good sign. If the offer were to insulting low, they would have flatly said "No". Had I been too generous in my offer, they would have said "Yes" and I would have kicked myself for it. So as it stands, I think I came in the right range but I won't know till I get a formal answer. In some cases in Japan, this type of transaction may need to be consulted with other people in the family which can take time for everyone to agree.

Friday, March 5, 2010

Fees Guide

Not only is land expensive you can't forget about the fees which total about 6~8% of the total price of the home.

Below has lots of information but wanted to provide the Kanji and Hiragana for those you want to do more research:

印紙税 (いんしぜい)

仲介手数料 (ちゅうかいてすうりょう)

登記費用 (とうきひよう)

不動産所得税 (ふどうさんしょとくぜい)

固定資産税 (こていしさんぜい)

都市計画税 (としけいかくぜい)

ローンの保証料 (ローンのほしょうりょう)

Out of all these costs the main one to watch out for are the realtor's commission and the loan guaranty fee. These 2 can make up almost 5% of the 6~8% closing fees.

With regards to latest land appraisal data used for Tax calculations, you can find it in the site below:

Wednesday, March 3, 2010

More Design Books

What I love about design books is that they are both inspiring and informational.

Below are 2 recent discoveries:

The first is "the not so big house: A Blueprint for the Way We really Live".
What love about this book is that it goes against the trend to build McMansions, instead favoring good design and efficient use of space to build a comfortable usable home that has character.

The book is full of practical ideas for all range of budgets.
Although the "not so big" homes it showcases would be considered castles here in Japan, it gives plenty of interesting design details to warmth to rooms.

There are few good Japanese Home Design books out there in English, but this is the best book I've found that matches a more western aesthetic with a "just big enough" Japanese sensibility.
Highly recommended.

Below is a photo of an integrated Living, Dining, Kitchen. LDK.

The second discovery is a resource on general design concepts and materials:
It's a good resources for understanding natural light, diagonal lines, etc.
The materials are given a rating for decorative suitability, costs, and maintenance.
As opposed to other books which show 100 different designs. This one focuses on about 12 and goes into the details that makes them special.

Working with an Architect

A friend's advice:
My friend Michel who is an American architect working for a firm that specializes in institutional buildings (think universities, not jails) had some good advice to give:

- Make sure you have a good relationship with your designer. Trust is an important part of the process and you need to be very open about everything.

- You are well within your right to be demanding of your architect. If anything feels uneasy, ask for more clarification, more sketches, more ideas. After all, you're only going to do this ONCE.

- Pay your designer a fair wage, a dedicated designer will really put in a lot of effort in building a dream home that fits your style and budget. That's typically 10% these days but is negotiable.

- Ensure your designer's interests are aligned with yours. At the end of the day, designers want to earn a good living but they are also motivated by the desire to materialize their client's dreams. To help achieve this, they can help negotiate on your behalf things such as materials and furnishing costs so you can get a good quality home for the right price. To clarify, the approach here is not to drive the cost of house down. The goal is to have more for the same price. Remember that they may want to show case your home as part of their portfolio.

To end this post, we have just started working with Sakamoto-san from the Institute of Space Technology and Architecture. (LINK) He was introduced to us by a prospective builder. Although no formal contract has been established, we have received some preliminary plans based on initial discussions. As we move further along the process of acquiring land I will profile Sakamoto-san and his firm in greater detail as we focus on the Design process.

Funding: Try, Try again

Try once:
So I got the results of my pre-approved loan application yesterday from MUFJ and was slightly disappointed as they were only willing to loan about 90% of the amount I had applied for.

When I requested the criteria for deducing such an amount, the bank was very courteous in their explanation that it was really based on the amount that the insurance company would cover in case of default. Unfortunately, the assessment process they explained is very gray and they could not provide any clear suggestions with regards to improving one's profile to be able to borrow more.
On the positive side, they did not reject me and the loan is approved up to that amount. It's up to me to find something that fits within that budget. At least one very important parameter has been set and this helps the overall planning. And could possibly help in land price negotiations...

Try Again:
Still I think I'd kick myself if I didn't go around and try another bank and see what they can loan me. Since the paperwork is all the same, it's just a matter of filling out the form. I submitted the papers today. In a way I wished I had submitted to both banks at the same time to save time. But lesson learned. I should get an answer by middle of next week.